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back to article Tim Cook: Apple to manufacture Macs in US in 2013

One day after Apple's stock suffered its biggest hammering in four years, interviews with company CEO Tim Cook appeared in both video and print covering a broad range of issues, including Apple's plans to move some manufacturing to the US and Cook's reasons for showing iOS chief Scott Forstall the door. When asked by NBC's Brian …

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Mushroom

Globalisation is coming back home

Chinese labour is starting to get more expensive, it would seem.

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Anonymous Coward

Re: Globalisation is coming back home

About time stop all businesses outsourcing or moving production.

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Headmaster

Re: Globalisation is coming back home

"About time stop all businesses outsourcing or moving production."

Outsourcing <> shipping to China. Apple will still outsource production, even if it's in the US. Every company outsources something, be it the cleaner, security guard, electrician or IT.

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Meh

Re: Globalisation is coming back home

Chinese labour was never the lure for companies. It was the high integration of the supply chain, with all needful elements nearby to the assembly plant. China has been far ahead of most countries in this regard for a while now, even outstripping Japan and Taiwan. The efficiencies of a highly integrated supply chain outweigh the labor costs for assembly.

This is why BMW now makes their X3 in the US, because the suppliers of their seats, tires, etc., are all nearby to supply components on a Just-In-Time basis.

I remain skeptical, given the US regulatory environment, but at least Apple is trying. HP and similar gave up long ago.

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Gimp

Re: Globalisation is coming back home

Before you get too excited, I believe "manufacture" is whalesong for "glue together"

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Thumb Down

Re: Globalisation is coming back home

>I remain skeptical, given the US regulatory environment

Ah another shareholder paying at a %15 tax rate that believes getting rid of slave and child labor, 80 hour work weeks in dangerous conditions has made the US uncompetitive.

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Re: Globalisation is coming back home

"whalesong for "glue together""

Awesome. +1

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Re: Globalisation is coming back home

"This is why BMW now makes their X3 in the US, because the suppliers of their seats, tires, etc., are all nearby to supply components on a Just-In-Time basis"

OR its because the US is the biggest market in the world for SUV's, and shipping a car from China is exponentially more expensive than shipping costs for consumer electronics that fit in your hand.

I think this will be seen as folly, it will be massively expensive. Apple are struggling to compete on costs with Samsung and co now - how are they going to do it with more highly paid (and less efficient) US workers and paying US taxes?

Steve is gone, there's been little innovation since the first iphone (especially compared to the competition), and Cook seems to believe his own press.

The US had a real estate bubble, now they've had an Apple bubble, and its deflating back to a realistic level.

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Stop

Re: Globalisation is coming back home @ Chet

"Apple are struggling to compete on costs with Samsung and co now"

Really Chet? No Really? Got a source for that statement?

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Re: Globalisation is coming back home

I'm curious about what you mean by less efficent workers? Given you mention price seperately I assume you mean 'work done per hour' rather than per dollar paid.

One of the biggest misconceptions is that the US doesn't manufacture much and it has been in significant decline. The number of jobs has declined significantly (down to 12m from 16m in the last 10 years alone) due to automation but US factories account for 18% of global output. If anything it's workers (or rather their machines) are more efficent (in the same 10 years productivity has gone up approximately 35%).

Gone are the days of uncle Fred leaving highschool and spending his life welding car fenders (and getting at least a third of them upside down). Now his kids have to go to college to run the automated production lines.

I'm not passing comment on it being a better or worse situation, just that we actually make about the same amount of stuff, just with less people, and the biggest reason is the efficency of the workers and the machines. Yes there have been issues with segments of the industry being inefficent due in part to union demands but bankruptcies and offshoring has gone some way to dealing with that.

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Re: Globalisation is coming back home @ Chet

Apple have 30% margins they can cut, Samsung doesn't. Apple makes one phone model a year giving them huge economies of scale, reduced r&d and support costs. Samsung may indeed be able to knock out a phone cheaper than Apple, that doesn't mean that is the ground they need to compete on. Apple appears to still be selling a lot of phones and maintaining its historically obscene margins.

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Re: Globalisation is coming back home

Came to say something similar. For the record, DNRTFA.

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Re: Globalisation is coming back home @ Chet

But can they?

Whilst I salute a company actually investing in their country of origin, isn't one of the reasons why their shares are so high, due to their large margins. If the margins drop it would be interesting to see if the share holders hold on or start selling.

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Meh

About time!

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Collaboration

My country was really good at collaboration during the War, they were A1, gissa job monsieur American pigdog!

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WTF?

So how's it going to work?

US labour costs vs Chinese labour costs? Come on...

If true, then Apple machines are going to get a lot more expensive.

Unless of course, they're made in Mexico by Foxconn and trucked over the border for "final assembly".

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Re: So how's it going to work?

It's not just labour. It's also logistics and process. In addition to using fewer hands and more robots, the cost to ship a unit from South Carolina to Cupertino is lower than shipping a unit from Shenzhen. I'm sure one of the reasons to build iMacs and not iPhones in the US is you can put more iPhones into a 40' container than you can iMacs and that means the per unit shipping cost of iPhones is lower.

Also a side benefit of local manufacturing is not having to deal with time zones. Flaws can be found faster and problems can be resolved quicker when HQ and the factory floor aren't a half day apart. Even shipping samples by air for approval means waiting at least a day with the factory either on hold or potentially stamping out bad product the whole time and that doesn't happen when it's only across town.

I'm sure Apple has run the numbers and decided they won't be worse off and they'll probably get a nice tax break on any investment they make.

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Here (in the USA)?

A whole bunch of the manufacturing process is in the process of being automated, and the more you can automate means the less "labor" you put into the product. Now that labor is becoming more expensive over "there", it makes sense to invest some $$$ in improving automation here and "make" it here as well.

If this weren't the case, ALL automobiles would be made "overseas with American components" and brought back here. Of course, the labor that IS done here will most likely be done in right-to-work states (which is probably a "good thing").

Now when will AAPL go north of $700? Gotta love that stock!

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Happy

It's not the costs, it where the cost are.

When you have a product that's labor intensive to assemble then you make is somewhere where labor costs are cheap ... so if they plan to build the new devices in the US then you can probably bet that they are going to cost a lot less to assemble.

In other words, they are going to be made differently ... I'll leave the rest to your imagination...

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Re: It's not the costs, it where the cost are.

You seen the new iMac teardown? That's pretty complex as computers go, and something tells me they're not going to cost less to assemble in the US. And it doesn't look like the kind of thing that could be automated either...

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Re: It's not the costs, it where the cost are.

You can quite easily stick screens on chassis. They're a PITA to get off though and put back on properly at home though.

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Happy

Re: It's not the costs, it where the cost are.

Hey Dan 55, I never said that you'd like it.

You know, I felt much the same way as you when they released the 8080 - how do you repair it?

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Ass hole

"The consumer electronics world was really never here," he said, "and so it's not a matter of bringing it back, it's a matter of starting it here."

What a load of crap. So I suppose all those television, radio, computer, cell phone, and you name it products that started life here in the good ole USA were NEVER made here?

And I agree with other posters, this isn't about bringing it to the US, its about reducing costs through automation. Notice, however, that it will still be Foxconn doing the work. So while the production may be coming stateside, the cash will still be headed to Cupertino and China.

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Re: Ass hole

"What a load of crap. So I suppose all those television, radio, computer, cell phone, and you name it products that started life here in the good ole USA were NEVER made here?"

Most were made in Mexico, Japan or south east asia. No one has historically manufactured the volumes Apple needs.

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Anonymous Coward

Re: Ass hole

You're right and Cook knows that because Apple was making Macs in the US up until at least the Power Mac G4.

However he probably meant the mass market consumer electronics industry which was never really in the US. There was never an electronics assembly line there with enough scale for making the millions of machines demanded these days.

The Japanese took that ball to the Asia Pacific region starting with the Sony TR-63 transistor radio.

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Re: Ass hole

Maybe not in your lifetime but that's patently untrue. All of those items where mass manufactured in the US up until the end of the 80s when industry lobbies managed to get protectionist laws changed and then capital fled the country for regimes with a more 'negotiable' position on pretty much everything.

Along with massive government debt it's all part of the Reagan legacy.

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Re: Ass hole

Actually I'd suggest you take a look at a person named Edward Deming... the move of manufacturing tto Asia took off way before the 80's.

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Re: Ass hole

"So I suppose all those television, radio, computer, cell phone, and you name it products that started life here in the good ole USA were NEVER made here?"

Shhh - Tim is trying to make himself and Apple sound like pioneering genuine american heroes...

You weren't expecting Apple to sell itself using boring things like straight facts were you (he says swearing at his macbook which just crashed again, but was marketed as "it just works" :-)

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Phew!

"Customers want iOS and Mac OS X to work together seamlessly, not to be the same ..."

Thank God for that!

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Re: Phew!

Yup, I wish MS would get that notion of one OS for all devices out of their heads.

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Pint

Re: Phew!

I wonder if Shuttleworth remained conscious after he read that.

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Devil

Re: Phew!

Well scrollbars now look remarkably similar and by default are set up better for touch, even if you use a mouse. Launchpad is spectacularly unintuitive if you're using a mouse, you have to click and slide then release the button to change page when a simple click at the side of the screen would have done the job. Their calendar/address book/notes apps looks pretty much the same and they had the opportunity to take out the iOSation in Mountain Lion or at least put a tickbox in preferences asking if you wanted Aqua or Skeuomorph nonsense but they didn't.

So Tim's definition of working together seamlessly seems to include making it look and feel the same even if it isn't the same, which I doubt the OS for desktop/laptop and slabs ever will be. Despite the seamless look, Windows 8/Phone 8/RT aren't the same under the hood either. Like the rest of the interview, it's impossible to get a clear answer out of him.

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Re: Amen

"Thank God for that!"

Indeed, I'd like OSX to remain more or less the same as it is. I didn't mind the changes they made for Mountain Lion but I expect it to remain a desktop OS designed around a screen, keyboard and pointing device (and a great engineering workstation to boot).

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Diversification

Its natural for Apple to explore manufacture in the USA and elsewhere. You never really know how good or how much it will cost until you try.

Several Mac models already come with "Assembled in the USA" labels.

Apple tried very hard through the 1980's to build in the USA, but trying to be competitive with a factory in California stacks the odds against you.

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Anonymous Coward

Re: Diversification

Having anything in California stacks the odds against you.

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Re: Diversification

"You never really know how good or how much it will cost until you try."

Or how much a pliant President who cares more about announcements than managing the budget will give you in free handouts.

After all it was the 1 question Obama asked Steve Jobs at an industry seminar...

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Anonymous Coward

Compared to Ballmer

he seems quite rational.

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Re: Compared to Ballmer

Compared to Ballmer, Mahmoud Ahmadinejad seems quite rational.

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Anonymous Coward

tim cook better keep his word or say hello to mr baseball bat

d

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Not like they didn't already build in a high-cost economy...

Apple's existing directly-operated manufacturing facility was in Ireland, albeit actually in a large council estate, but still not a particularly low-cost economy.

Believe all its churning out recently are Mac Pro's but it has previously made the larger iMacs and the server line, when they had one.

Going back further it manufactured practically everything, but that was when Wales churned out most of the TVs for this part of the world and Scotland had a thriving semiconductor industry!

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Re: Not like they didn't already build in a high-cost economy...

Apple's existing directly-operated manufacturing facility was is in Ireland, albeit actually in a large council estate, but still not a particularly low-cost economy.

It's in the process of expanding at the moment. Not thanks to manufacturing though - the new jobs are tech support and office jobs. They make the Mac Pro alright, but I suppose they're priced high enough to somewhat absorb the extra manufacturing cost.

And let's not kid ourselves; Apple wouldn't be doing anything in Ireland if it wasn't for the creative accounting practices they're able to get away with...

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Re: Not like they didn't already build in a high-cost economy...

"Apple's existing directly-operated manufacturing facility was in Ireland"

Home of comparatively low taxes and abundant business friendly accounting loopholes?

Finance-wise Ireland isn't a high cost country, so if you invest a lot in automation (as opposed to workers) then its a low cost place for them.

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Devil

Re: Not like they didn't already build in a high-cost economy...

Finance-wise Ireland isn't a high cost country, so if you invest a lot in automation (as opposed to workers) then its a low cost place for them.

Production line staff are mostly temporary agency workers so would presumably be funded from a cost center other than HR.

They're brought in for the busy periods, and send downtown to sign on at the dole office when things get quiet. So whether it makes sense for Apple Ireland to invest a lot in automation is debatable.

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Re: Not like they didn't already build in a high-cost economy...

"Home of comparatively low taxes and abundant business friendly accounting loopholes?"

Now, perhaps. Not in the 1980s when they built there, though.

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Anonymous Coward

If Apple do it then others will think about it too. If only to do the sums and forget the idea, but they will have at least evaluated it.

Most company management types are copycats, they look to see what the competitors do and do the same. Overpaid sheep mentality.

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Its possible

The US could make Puerto Rico the 51st state.

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Re: Its possible

"The US could make Puerto Rico the 51st state"

Why not Shenzen hehe!

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Coat

"Next year we will do one of our existing Mac lines in the United States"

Amusingly enough "mac" as in "MacBitch* kinda sorta means "son of", or so I'm told.

"Next year we will do one of our existing son lines in the US"

Think of the children...

That's still better than relying on chinese labor to make your sons, come to think of it. Or so momma says.

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WTF?

"Over time there are skills that are associated with manufacturing that have left the US"

Apple really solved this challenge.

Now they are glueing iThingies together. This means they are generally unserviceable and defective units are only fit for the garbage dump.

A really, really 'Green' solution.

I wonder if Apple, in their competitor product strip downs, ever have wondered why others batteries are removable and that they actually use screws?

One thing Apple is now facing - America actually has Labour Laws which means no 7 day work weeks and unpaid overtime such as the Foxconn plants operate under in China.

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Trollface

For apple products lover

http://try2bs41m.com/coffee-vs-icoffee/

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