Geography Reference
In-Depth Information
The Commodity Chain for the iPod Processor
Kirkland, WA
Cambridge, UK
Seoul, Korea
San Jose, CA
Shanghai, China
Hyderabad,
India
Hsinchu, Taiwan
H
o
ng
Ko
n
g
Design of
Chip
Modifications
Chip
Packaging
and Testing
Chip
Fabrication
iPod
Assembly
Basic Chip
Design
Warehouse
Firmware
Design and
Coding*
* The firmware code is written by developers in Kirkland, San Jose, and Hyderabad.
The location of Hyderabad allows for work to be done 24 hours a day. The final
chip design and firmware are then sent to Taiwan for fabrication.
Figure 12.11
Inside an iPod: The PortalPlayer World.
Map designed by Stephen P. Hanna, based on
information from: Andrew Leonard, “The World in the iPod” Spiegel Online, August 8, 2005.
In his piece on PortalPlayer called “The World in an
iPod,” journalist Andrew Leonard explains that PortalPlayer
has a 24-hour development cycle because engineers in
California and in India can work around the clock (with
time zones 12 hours apart) to design and redesign the
microchip. The actual microchips are created in Taiwan.
The commodity chain for PortalPlayer (Figure 12.11)
reveals how people and places around the world intercon-
nect to design and create the company's microchip.
Linden et al. estimate that the PortalPlayer compo-
nent is a small fraction of the cost of an iPod but that the
research and development that goes into PortalPlayer and
other innovative components that differentiate the iPod
from its competitors receive more value from the sale of one
iPod than does Invotec, the company that actually assembles
the iPod. Linden et al. concluded that “While the iPod is
manufactured offshore and has a global roster of suppliers,
the greatest benefi ts from this innovation go to Apple, an
American company, with predominantly American employ-
ees and stockholders who reap the benefi ts” (2009, 143) and
that the second greatest benefi t goes to the two Japanese
companies that produce components that help differentiate
the iPod, the hard drive and the display screen.
The act of consumption is an end point of a com-
modity chain. It is also the beginning of the product's
afterlife. What happens when you discard or donate the
item? What are the costs or benefi ts created by the funds
(whether funds for a charity or profi ts for a corporation)
generated by your purchase? Corporations such as Apple,
which sells the iPod, work to reduce consumer waste by
recycling iPods and computers, and by offering discounts
to consumers who recycle their old iPods. Nonetheless, in
many global cities in poorer parts of the world, adults and
children work in garbage dumps to recover valuable cop-
per wire and other components of computers and related
electronic devices made by Apple and its competitors.
Tracing the commodity chain of the iPod demon-
strates that rarely does the consumption of a particular
product have an unambiguous positive or negative conse-
quence. In addition to the fact that components are made
all over the world and assembly is only one small part of the
commodity chain, we should consider the environmental
consequences of steps in commodity chains. Jobs created
by industry in one place can cause environmental damage
in another. Consumption, or purchasing an item, is the end
point in a commodity chain that affects places in a variety of
