Patrick McGee

"Supporters of the R&D hubs say the negative view of them reflects the insecurities of engineers in Cupertino, who were losing their power as more decision-making got done in China. Before the hubs were built, Apple had been sending so many engineers to China on temporary trips that Cupertino convinced United Airlines to begin direct flights from San Francisco to Chengdu, three times a week, arguing that Apple would regularly buy enough of the thirty-six first-class seats to make it profitable. The 6,857-mile flight became United’s longest nonstop flight. Two years later, Apple again convinced United to begin flying nonstop—to Hangzhou, a tech hub on the outskirts of Shanghai. “Hangzhou is a bit of a schlepp from Shanghai,” says a former Apple executive. “Yes, you can take a bullet train, but for all the American guys getting off the plane from Cupertino, navigating the train station is kind of complicated. So Apple basically said to United, ‘Look, you put up a flight to Hangzhou and we’ll fill it for you.’ ” Apple’s signature line had long been that its products were “designed in California,” but the hubs began to indicate otherwise. China’s influence was growing, and as the hubs performed more work, the engineers there would openly question the need for so many of their counterparts to constantly fly in from America."

"“I don’t remember, ever, a strategic withholding of information,” says a former Apple industrial designer. “All we cared about was making the most immaculate thing… We were inventing every day. Every day you’d invent your way through a problem. It was absolutely wonderful as an experience. But I guess we were unwittingly tooling them up with incredible knowledge—incredible know-how and experience.”"

"Colleagues called Tony “the Blevinator” for being ruthless and stopping at nothing to get a good deal. He deployed tactics so detailed, aggressive, and consequential that a supplier ostensibly winning an Apple order might later regret it given the scale of investment required, the demands Apple would place on them, and the fact that the company could turn on a dime to another supplier if needed. “Apple has a trail of dead bodies miles long,” says a high-ranking executive at a contract manufacturer that worked with the company for decades. “When business is great, everybody wins. And when it’s not, they go under.” Blevins had a particular ability to read other people. One says it was “a mind-blowing thrill” just to watch him negotiate. “You could see where he was going, and you knew that he was going to get what he wanted, because he was so much smarter than the person he was talking to,” the colleague says. “He just steered the conversation to the ultimate ending of what he wanted. It was absolutely brilliant.” Another recounts how, the night before a negotiation, Blevins talked through his reasoning and foretold where his opponent would end up. The following day, after hours of psychological warfare and tit for tat over the smallest details, the opponent proposed the very thing that Blevins had predicted. Then Blevins acted like it wasn’t necessarily in Apple’s best interests to agree and signed the deal. The Apple team walked out, awed by what had transpired as Blevins chuckled about it."

"“We will be first and [a] bull’s-eye will be drawn around what we are doing.”"

"When one engineer, six-four, tried walking out of the hotel to go for an evening stroll, the concierge stopped him and warned it was too dangerous. “I’m a big guy,” he said, dismissing their worries. “A dozen monkeys can kill a gorilla,” the concierge responded."

"On a tour of the facilities, he observed that only some of the buildings had air-conditioning units, but he was stumped trying to figure out why. He asked his guide, “How do you decide which facilities to put air-conditioning in?’ And they go, ‘Well, whichever facilities have the equipment that needs air-conditioning.’ ” Requesting the anecdote be anonymous, the executive underscores the point: “They cared more about the machines than the people.”"

"Apple kept close tabs on its suppliers, moving from one facility to another to ensure they could meet the caliber and scale it needed. One operations manager refers to “the Apple swarm effect” to describe how they’d descend on factories to teach the suppliers. “It was literally Engineering 101, showing them how to do everything,” says another person involved."

"The final design that emerged was wild, like seeing a Ferrari in a land of station wagons. It was the first computer that looked anthropomorphic, its flat screen of a face elegantly suspended in the air by a chrome neck comprised of metal used in aerospace. “They had to be forged, machined, heat treated, polished, and chrome plated, because their walls are so skinny to fit all the cables in, to flex and move, and support the bearings,” says a senior engineer on the project."

"Complicating the situation, the complaints of the yellow cows had been amplified throughout 2012 by ordinary customers who struggled to purchase iPhones at the prices set by Apple. And when customers had problems with their phones, booking an appointment could often prove tough as the resellers began using mainframe computers in warehouses that either reserved all the spots or crashed the system. Then they’d stand outside the stores selling the appointments. “It was much more sophisticated than you could possibly imagine,” a former Apple executive says of their tactics."

"Foxconn began offering final assembly on the cheap for the same reason Costco sells hot dogs: It gets people in the door. Foxconn then upended the world of tooling by giving it away for free. That is, Gou would offer to pay the up-front costs of establishing the custom molds, dies, fixtures, and other equipment necessary to start building a product at scale. “That can be half a million or a million dollars,” says a former Apple engineer. “And that was absorbed by the manufacturer—by Foxconn. So Apple just paid for the production parts.” Then Foxconn would work to integrate all procurement, manufacturing, and logistics into a one-stop shop. It made its money back the same way a mobile carrier might—giving customers a free phone but earning fees in a two-year contract."

"One former Apple executive points out that the auditing teams typically arrived on a schedule, which gave suppliers time to prepare in advance. Often, he recalls, the sequence of events was like watching bad actors in an amateur theater production. In one audit, a group of laborers were busily stacking a bunch of pallets, ostensibly demonstrating how they were recycling the trays as part of some new environmental initiative. “The trays were stacked on a pallet, and [one of the workers said], ‘These are going to the recycling center!’ ” At that point, the executive asked, “How are they getting to the recycling center?” And the worker replied, “They’ll get picked up by a forklift!” The executive looked around the room, noticing there was no exit wider than a standard door. So he asked, “How’s the forklift going to get in here and collect the pallet?” “That’s when you saw the penny drop,” the executive recalls, “when you realized that they got a couple of guys to bring the empty pallet in sideways, put the pallet on the ground, and stack a whole bunch of empty trays on there. They hadn’t thought about the fact that they were going to tell people that a forklift needed to come into the room to collect the pallet.”"

"He tried to sound the alarm in Cupertino, but he had little influence or clout. The company was racking up record sales. Whatever problems Xi had expressed when he first entered office had—apparently—been solved. So when Guthrie would show up in Cupertino trying to deliver the message that Xi Jinping was taking China back to the 1990s—an era of “technology transfer” when accessing the Chinese market also meant handing over secrets to a local joint venture partner—he was easy to ignore."

"What saved him was a visit from a childhood friend whose father had died of suicide when he was just twelve years old. Guthrie, a dad himself, asked his friend how long it took to get over his father’s death. At the time, Doug was in a deep depression and looking for absolution, someone to tell him it was okay to say goodbye to the world. His friend responded with both care and anger. “I don’t know what you’re thinking of, but that was thirty-six years ago, and not a day has gone by that I haven’t thought about it—and been hurt by it. You don’t get over something like that.” The interaction shook Guthrie out of his state and compelled him to seek medical help. Only then was he diagnosed with Bipolar II, giving him a new lens to understand his entire life."

"*Rival Partners: How Taiwanese Entrepreneurs and Guangdong Officials Forged the China Development Model,* by Jiehmin Wu, and *The Making of an Economic Superpower: Unlocking China’s Secret of Rapid Industrialization,* by Yi Wen. Special thanks to the Computer"

"Apple is a famously secretive company—more so than the US military, according to some sources with experience at both. To the more than 200 people I interviewed who took great risk to speak with me: I’m forever grateful for your trust, time, patience and honesty—without that, quite simply, there’d be no book. Not being able to mention you all is frustrating; I hope you’re proud of what came out of our conversations."