Why Is It So Hard to Keep Apple's Products Secret?

Apple's two new iPhones were almost entirely spoiled before yesterday’s launch event, prompting questions about what happened to Apple's confidentiality. The Wall Street Journal today wrote an article pointing out that the growing difficulty in keeping new products secret is mainly due to the estimated million-level number of people involved in product manufacturing, a figure that continues to grow. Additionally, with smartphones, participants can effortlessly take pictures of the new products.

Here are the main points of the article:

Tim Cook stated after becoming Apple's CEO that he would double down on reinforcing the company's confidentiality. However, it now seems difficult to uphold this commitment.

Yesterday's new iPhone launch by Apple was almost devoid of surprises. In fact, months before the event, photos, videos, and detailed descriptions of the iPhone 5s and iPhone 5c had already been leaked. These included features like fingerprint recognition technology, the new colors of the iPhone 5s, and its 64-bit processor. Some websites even exposed the packaging of the iPhone 5c and video demonstrations of its design.

An Apple spokesperson declined to comment on this article, while its executives attempted to highlight the positive side of pre-launch publicity. "Some of you may have already seen some spy shots online, which is cool because people are very excited about our products," said Phil Schiller, Apple's Senior Vice President of Worldwide Marketing.

Two reasons

Supply chain management experts pointed out that one major reason for the increasing difficulty in maintaining product confidentiality is the growing number of people involved in designing and producing consumer devices, reaching a massive scale. For Apple, those involved in product manufacturing include engineers at its Silicon Valley headquarters as well as low-wage workers on assembly lines at contract factories in China.

"You pay employees a few dollars a day, but that doesn't guarantee they won't leak product information," said Pierre Mercier, a partner at Boston Consulting Group and director of supply chain research.

Analyst Thomas Dinges from market research firm IHS iSuppli estimated that when Foxconn, Apple's contract manufacturer, produced the first-generation iPhone in 2007, its workforce was less than 50,000 people.

He said that back then, the total number of people across Apple's entire supply chain involved in iPhone production might have been around 350,000, whereas now that figure is estimated to exceed 1 million. "Many more people know about your product," Dinges said.

He added that the intense public interest in consumer electronics also drives websites to closely track every detail of new products.

Additionally, smartphones equipped with high-definition cameras contribute to the leakage of product information.

"It has become very easy to leak products because your phone can take pictures," Mercier pointed out. "Workers can take and upload pictures within seconds. Even if their actions are discovered, it will be too late by the time they are caught."

Not much can be done

Supply chain experts indicated that for device manufacturers like Apple, one way to prevent product information leaks is to establish their own factories. However, compared to relying on a network of suppliers and contract manufacturers providing specialized components, this method is much more costly.

Joseph Carter, a professor of supply chain management at Arizona State University's W. P. Carey School of Business, pointed out that there is not much Apple can do to control the flow of product information. Pursuing legal action against companies or organizations publishing spy shots would require a significant amount of time and resources. Carter also noted that even if such steps were taken, it would be hard to stop disgruntled employees from taking pictures of new products.

The opportunity to photograph new products extends beyond just the assembly line workers; it also includes personnel involved in freight transport or customs brokerage.

Carter stated that for Apple, the key lies in trying to delay the disclosure of product information as much as possible to avoid negative impacts on sales or the product itself. "The reality is that there are no secrets anymore," he concluded.