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Who's the Top Tech Manufacturer? Surprise: It's not Apple

July 11, 2011
Western Digital rises to No. 1 on the IW 50 Best Manufacturers ranking followed by Apple Inc.

Consumers expect computers to perform more tasks than ever before. Once-disparate functions such as telecommunications, entertainment and document filing have converged into laptops and other computers, driving the demand for increasing amounts of data storage.

That's one reason why three of the top 10 manufacturers on this year's IW 50 Best Manufacturers list come from the "computers and other electronic products" category. Claiming the top spot in 2011 is hard-disk drive manufacturer Western Digital Corp. The Lake Forest, Calif., company excelled in key IW 50 measurements that include return on equity, return on assets and revenue growth.

See the 2011 IW 50 Best Manufacturing Companies list with Web-exclusive profiles and data.

See the Top 5 Best Manufacturers Slideshow

Read "IW 50 Best Manufacturers: Methodology"

Western Digital thrives in a highly competitive industry partly due to its focus on controlling costs. In 2010, the company's revenue grew 32.2%, return on equity reached 43.3% and return on assets was 26.1%. The company attributes much of its success to operational efficiencies, including its vertically integrated business model and agreements with suppliers to drive down raw materials costs. In April 2010, the company purchased the magnetic media sputtering operations of Hoya Corp. and Hoya Magnetics Singapore Pte. Ltd. to secure glass substrate supplies.

Apple Inc. is another major player in the technology sphere that moved up a spot from last year's IW 50. Second-ranked Apple's revenue grew 78.5% in 2010. The company's inventory turnover rate was 52.5, well above the IW 50 average of 12.05. Apple benefited from a 93% increase in iPhone net sales in 2010, accounting for $25.2 billion, or 39% of the company's total net sales for the year.

Apple's success carried into the first three months of 2011, during which the company surpassed competitor Microsoft Corp.'s profit. Microsoft maintained its No. 6 ranking on the IW 50. One area where the company holds an advantage over Apple is profit margin. Microsoft reported margins of 30% in 2010 compared with Apple's 21.5% profit margin.

Beyond the technology sector, tobacco producers Philip Morris International Inc. and Lorillard Inc. maintained their high positions on the IW 50. No. 3 Lorillard, last year's top-ranked IW 50 company, set market-share and profit records in 2010, driven by higher prices and a strong performance from its flagship Newport brand.

Mattress manufacturer Tempur-Pedic International Inc. entered the IW 50 at No. 5 after not appearing on the list last year. The company's return on equity was ranked among the highest of IW 50 companies at 91.2%. The overall IW 50 return-on-equity average in 2010 was 45.8%.

This year's IW 50 includes several other newcomers. Deckers Outdoor Corp. debuts at No. 8. The Goleta, Calif.-based footwear company's sales rose above the $1 billion mark in 2010. The company attributed the strong year to its popular UGG brand boots.

Coal producer Walter Energy Inc. enters the IW 50 at No. 21. The company's revenue grew 64.2% in 2010, about triple the overall IW 50 average. The company said it benefited from higher coking coal prices in 2010, lower operations costs and increased demand from the rebounding steel industry.

Overall, 2011 IW 50 Best Manufacturers showed much stronger results than the 2010 top-50 winners.

Average profit margins rose more than three percentage points and mean revenue growth was 21% compared with an average decline of nearly 2% for last year's IW 50 companies.

Click here to see the entire 2011 list. Also, to view a slideshow of the top 5 IW 50 manufacturers click here.

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