The Secret to Apple's Success

Apart from messing up the tagline "Designed by Apple in California," this article from Businessweek is right on point. When most computer firms are basically marketing firms for outsourced production, Apple continues to keep design in-house and exercises extremely tight control over manufacturing.

Many executives believe that outsourcing design allows them to lower the salaries they must pay, and lets them have engineers working on the products across all time zones. Jobs thinks that's short-sighted. He argues that the cost-savings aren't worth what you give up in terms of teamwork, communication, and the ability to get groups of people working together to bring a new idea to life. Indeed, with top-notch mechanical, electrical, software, and industrial designers all housed at Apple's Infinite Loop campus in Cupertino, Calif., the company's design capability is more vertically integrated than almost any other tech outfit.

The result is the often-imitated, but never-duplicated Apple user experience. Things look right, feel right and work right because Apple excercises obsessive control over design and manufacturing. Apple is the design leader in its field and one of the most profitable manufacturers because it doesn't outsource a lot of functions, more than because it does.