Abstract
Kindle has been one the success stories created by Amazon and has been one of the most popular e-readers for millions of customers throughout the world. But, Kindle has also been part of the outsourcing revolution that’s taken many manufacturing jobs out of the United States of America. So the question arises, over the production of the Kindle and the reasons for outsourcing its production. There are many reasons associated with the decision; mainly the availability of better and cheaper technology in Asian countries is a fact. Over the years, as manufacturing jobs have been outsourced, Asian countries have developed better knowledge and understanding of technologies and have developed many new products and formulated technologies that have made manufacturing industry dependent on them. The U.S. government needs to make many changes in their manufacturing industry to ensure the jobs they have lost over the years are made to come back to the country.
Keywords: Kindle, manufacturing, etc.
Introduction
Kindle are e-readers envisioned, created and sold by American online retail giant Amazon. Kindle is known for its unique technology that helps customers to search, purchase, download, read newspapers, e-books, magazines, articles, etc. and read them on the device with immeasurable ease (Dudley, 2007). Much of the success has been based on the electronic paper Ink made by E Ink used in the Kindle. But, almost every other material or technology used in the Kindle is made in Asian countries such as China and Taiwan. This shows how even an electronics product created by an American corporation is more or less made in Asia. Years of outsourcing strategy have ensured that America looses not only the low skilled jobs, but overtime has started to lose engineering and design jobs to Asian countries. The problem is that Kindle finds both cheaper labour and better design engineering for Kindle in Asian countries, forcing Amazon to outsource (Shih, 2009).
Why U.S. is Losing Kindle Production
Kindle was designed in California by Amazon and one of the main components is the ink which is designed and manufactured by E Ink in Massachusetts. Apart from that, the majority of the production value is added by manufacturing it in Asian markets. Even though many of the products are designed in America, the vast majority of them are being produced in technology foundries in China, Taiwan, Singapore, Korea, etc.; and then they are packaged in American shores. The $60 display of the Kindle is manufactured by Prime View International in Taiwan, the wireless broadband module is manufactured in Korea and the lithium-polymer battery is also manufactured in Asia. This happens because the technological capabilities come from the stronger and more technologically advanced consumer electronics industry (Shih, 2009). This has happened because countries such as China, Taiwan, Japan, Korea, have developed their IT industries after years of outsourcing done by American companies.
This way Asia based manufacturers have managed to capture most of the value from the production of the e-reader. Even E Ink, the company that produces the ink used in the Kindle, is trying to sell themselves to Taiwan based Prime View International. Over the years, this has been a trend after the majority of the manufacturing has been moved to the Asian countries. The trend started with American companies moving the production to Asian countries for lower skilled jobs. But over the years, Asian countries such as China and Taiwan started developing production knowledge of the outsourced jobs, and the resulting manufacturing industry provided the American companies with the opportunity to start outsourcing the high skilled jobs too. This the source of problem as American companies have over the years let their capabilities get away and Asian companies have gained from it by improving their industries and developing many other progeny industries from the knowledge (Shih, 2009).
PC vs Kindle Production
The main difference between PC production and Kindle production is the place where the product is designed and manufactured. Kindle is designed in the United States of America and manufactured in Asia and PCs are both designed and produced in China. This is a noteworthy as 320.4 million PCs in 2011 were made in China, which means 90 percent of the PCs sold in the year were designed and manufactured in China (Schiavenza, 2013). Despite the increasing labour costs in China, the country is still making a lot of technological products and innovations-- and the trend is not going to change in the coming future. Therefore, Kindle’s design is still being made in California, many of the parts and assembly is coming from Asia. Since, E Ink is trying to sell themselves to Prime View International, it is possible that even the ink technology will be in the hands of Taiwanese company. Therefore, it is highly probable that even the Kindle’s production will be done in Asia in coming future.
Solution for U.S. Government
The U.S. government needs to change some of the rules to ensure insourcing process starts and U.S. manufacturing industry is boosted. The government needs to start courting more and more companies and help with exponentially to come and remain in America. The South Korean government is offering companies interest-free and tax-free loans and Indian government offers few businesses the opportunity to deduct their profits for a decade. Another measure is to become the most user friendly nation in the world. This means U.S. government needs to develop the infrastructure, manufacturing innovation, educated workers with skills, and maximize the short term financial returns of the businesses. Finally, the U.S. government needs to provide long term economic stability, tax reform, manufacturing quality and operational certainty (Kim, 2013).
Conclusion
Amazon’s Kindle is one of the technological products that is designed in America, but the parts are made and manufacturing is done in Asian countries such as China, Taiwan and Korea. This is due to the fact that overtime both the low skill jobs and the high-tech engineering and design jobs have been shifted to the Asian manufacturing sector. The difference between PC production and Kindle production is that the Kindle is still designed in California and produced in Asia, but PCs are both designed and manufactured in China. The U.S. government needs to start making changes to attract manufacturing jobs back to America. These actions include measures such as courting and helping business to settle, provide the necessary requirements to help them stay and grow and develop a framework for stability.
References
Dudley., B. (2007, 19 November). Kindle hacking, iPod parallels and a chat with the Kindle director. Retrieved 8 March 2016 from, http://blog.seattletimes.nwsource.com/brierdudley/2007/11/chatting_with_amazons_kindle_d.html
Kim., A. (March/April 2013). Three Ways to Bring Manufacturing Back to America. Retrieved 8 March 2016 from, http://www.washingtonmonthly.com/magazine/march_april_2013/features/three_ways_to_bring_manufactur043318.php?page=all
Schiavenza., M. (5 August 2013). China's Dominance in Manufacturing—in One Chart. Retrieved 8 March 2016 from, http://www.theatlantic.com/china/archive/2013/08/chinas-dominance-in-manufacturing-in-one-chart/278366/
Shih., W.C. (2009, 13 October). The U.S. Can’t Manufacture the Kindle and That’s a Problem. Retrieved 8 March 2016 from, https://hbr.org/2009/10/the-us-cant-manufacture-the-ki.html
