Originally Posted by Gatorguy
And all this time I thought those "major manufacturers" like Apple didn't build their own stuff here because overseas labor costs were so much less, specifically those in SE Asia (or even Mexico for that matter). Of course Asus isn't using North American labor either. I don't think you or anyone else has ever seen Apple leave money on the table. But for some reason they're doing that with the iPad's? Unlikely IMO. I believe there's very good profits in tablets once the tooling/line costs have been taken care of. Of course Apple doesn't have to worry about that part. That's currently Foxconn's problem. So yes, for Apple
it's certainly easier and cheaper than doing it themselves. Not so much for Asus.
Note too that China labor/mat'l costs are on an upward trend now, thus making Foxconn unlikely to retain Apple's contract for more than another year or two unless they move much of their plant to cheaper countries, which they're trying to do according to what I've read. Either that or Apple will be raising prices or making even less than you seem to think they do on iPad sales. With Foxconn already showing a loss for last quarter, I don't see how contract prices can do anything but go up.
I don't think you fully understand the situation. If it were as simple as Asian labor costs, Apple and others would simply set up their own factories. But why should they have to go through the years of wangling through the corrupt and nationalistic governments, and spend the billions it will cost, when there are companies there that do this? It would make no sense. And there are plenty of smaller companies here in the USA that do contract manufacturing. In fact, most manufacturing is contract in one way or another. Very few companies these days are so vertically integrated they can produce all their own parts and materials and assembly.
You know little about Asus. Asus also builds, on contract for other companies, even, in the past, for Apple. Both Asus and Acer got their start as contract manufacturers. They expanded out from there into their own brands, first with mobo's, and then complete computers.
Yes, I've noted in the past that labor costs in China are moving upwards at a fast clip. I estimate that in a few decades, maybe as soon as 2030 or 2040, at the latest, costs around the world will be about the same, and that shipping costs will make the difference. We've seen that with Japanese companies over the years. Much of what they make for our market, they make here.
That doesn't change the fact that it's much simpler and cheaper for a company to have a contract manufacturer deal with building factories and dealing with labor.
I don't understand why you are making a fuss about this because the facts are established, well known, and you are arguing against the wind.