When outsourcing fragments: Customer creativity and Technological Transmutations

One of the most fundamental decisions made in firms is about what functions or activities the firm should perform within its own hierarchy, and which of these it should rely on the market to perform. Outsourcing is an agreement in which one company contracts out a part of their existing internal activity to another company. However, this article contends that outsourcing has changed, and is changing in ways that make the application of neat, legal and technically correct definitions hard to use, and even harder to apply in strategy. Under the new outsourcing paradigm, technology is not a passive substance, rather it is an active force. We aim to look at the ways in which technologies are re-shaped and transmuted by consumers. Through this analysis, we add the consumer activity to the conventional definition of outsourcing. We focus on one of the most highly anticipated and influential new products of 2007 - the Apple iPhone.