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US Mac production likely to still rely on Foxconn, not American companies

post #1 of 34
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Though Apple will be bringing production of one full Mac lineup to the U.S. next year, it's likely that the primary supplier will be Taiwanese company Foxconn, which is planning an expansion to America.

Analyst Amit Daryanani with RBC Capital Markets said it's unlikely that American companies will handle stateside assembly for Apple. He specifically mentioned Flextronics International Ltd., which was originally founded in Silicon Valley in 1969 but is now headquartered in Singapore, and Jabil Circuit, founded in Detroit, Mich., in 1966 and now headquartered in St. Petersburg, Fla.

Both companies are already component suppliers to Apple, but Daryanani doesn't believe either of them will become assembly partners in America, as in recent years both Flextronics and Jabil have been shifting their focus away from assembly of consumer-centric products.

Instead, Flextronics and Jabil now focus their attention on high-mix and low-volume manufacturing sectors, such as healthcare and medical supplies. On the consumer side, Jabil and Flextronics are moving toward value-added components, where Daryanani noted engineering can be a differentiator.

Foxconn


While some American companies are moving away from manufacturing of consumer products, a Foxconn official indicated this week that the company is looking into an expansion to the U.S. A spokesperson for Foxconn said that its partner shave requested more products be built stateside, though the Taiwanese company declined to name specific clients.

Daryanani sees Foxconn as the most likely supplier for Apple's U.S.-based manufacturing. He noted that the company already has a few assembly and enclosure sites established in the U.S., with sizable manufacturing locations in Houston, Tex., Industry, Calif., and Indianapolis, Ind.

He also noted that while Apple has a number of key suppliers, the company's manufacturing has been largely done by Foxconn, which would make switching away from its partner a difficult transition.

"They have been an integral part of AAPL's supply-chain and have managed AAPL's supply-chain for multiple products, making them better positioned to handle such a transition," Daryanani wrote.

Apple revealed this week that the company will spend $100 million to bring production of one full line of Macs to the U.S. next year. Apple CEO Tim Cook told NBC's Rock Center that the plans have been in the works for years.

"We could have quickly maybe done just assembly, but it's broader because we wanted to do something more substantial," Cook said, suggesting Apple's domestic manufacturing plans will go beyond simply assembly and will include parts.
post #2 of 34
I suspect only Apple TV will be assembled here as it is low tech compared to the complexity of their computing models. The average american assembler should be able to handle that. Lets see if unions try to capitalize and possibly deter Apple from expanding their efforts at home.

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post #3 of 34
Originally Posted by JBlongz View Post
I suspect only Apple TV will be assembled here as it is low tech compared to the complexity of their computing models. The average american assembler should be able to handle that. Lets see if unions try to capitalize and possibly deter Apple from expanding their efforts at home.

 

"But Americans all have pudgy fingers. How will they fit inside that tiny plastic case?"

post #4 of 34
Robots. Apple will save money on shipping and labor costs
post #5 of 34
Will they be able to reuse the shipping containers, that they import the workers in, as living quarters?
post #6 of 34
A bit off topic but here are two videos showing US production of the first Mac and NeXT workstations...


The quality between the video production is quite evident.
Edited by SolipsismX - 12/7/12 at 6:45am

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post #7 of 34
He did say it would be an existing Mac. And, yes, Foxconn is not an American company, but they will employ Americans, so it is still a win, in my book
Edited by starbird73 - 12/7/12 at 7:10am
post #8 of 34
Quote:
Originally Posted by JBlongz View Post

I suspect only Apple TV will be assembled here as it is low tech compared to the complexity of their computing models. The average american assembler should be able to handle that. Lets see if unions try to capitalize and possibly deter Apple from expanding their efforts at home.

Cook said Mac, not device.

Mac Pro is more likely. Created more plug and play on the components and it only appeals to perhaps 10% of Apples audience. So it's a good low demand, mid complexity itemwith a fair bit of the parts made in the US anyway

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post #9 of 34
Quote:
Originally Posted by ifij775 View Post

Robots. Apple will save money on shipping and labor costs

If that is true then it just adds to why the Mac Pro is a strong contender. No need for super fine matching etc. perfect for a robotic, partially robotic line

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post #10 of 34
Quote:
Originally Posted by charlituna View Post


Cook said Mac, not device.
Mac Pro is more likely. Created more plug and play on the components and it only appeals to perhaps 10% of Apples audience. So it's a good low demand, mid complexity itemwith a fair bit of the parts made in the US anyway

 

Agree completely. It's also fairly expensive so I'm sure it has enough margin dollars to cover any increased costs such a move might have. 

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post #11 of 34

Another soft, doughy spot for Mike Daisey to exploit.

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post #12 of 34
These articles about Foxconn make it sound like Foxconn is not in America and are planning on expanding "to" America. They are already here with many locations in CA and TX. Hell, I am two doors down from a Foxconn plant here in Brea, CA (Orange County). Ok, I'm not sure if they are doing manufacturing/assembly and it could be all warehouse space. I still think it would be more accurate to say they are expanding "further" in America.
post #13 of 34
Quote:
Originally Posted by starbird73 View Post

He did say it would be an existing Mac. And, yes, Foxconn is not an American company, but they will employ Americans, so it is still a win, in my book

True, I agree and a ton of major companies here are not actually US owned as such and no one seems to mind. Here are just a few, http://www.cnbc.com/id/48216485/page/2
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post #14 of 34
Quote:
Originally Posted by charlituna View Post

Cook said Mac, not device.
Mac Pro is more likely. Created more plug and play on the components and it only appeals to perhaps 10% of Apples audience. So it's a good low demand, mid complexity itemwith a fair bit of the parts made in the US anyway

I totally agree, the next Mac Pro would be the perfect candidate to come home first. I'm not upgrading my MBP i7 till I see what's coming in the Mac Pro line. Now I have an iPad I'm tempted to forgo portability for power.
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post #15 of 34
ARM-based MacBook Air by 2014.

$999.00 -> top of the line quad-core Intel Core i7.

$17.50 -> dual-core 32-bit ARM-based A6X.

$??.?? -> quad-core 64-bit ARM-based AX?

Let's say the 2014 quad-core 64-bit ARM-based AX SoC costs Apple a whopping $50 each. That's hundreds less than the equivalent Intel chip. And that savings should more than make up the difference in total cost per MBA.

"Won't run Windows," you say? Well the MacBook Pro could keep the red-hot Intel chip just for the die-hards that need to run pro applications. A dying breed.

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post #16 of 34
I wouldn't believe for one second that Apple would assemble core products in the US - the reason: UNIONS. They would hold apple hostage if they produced iPhones and iPads in the US and Apple needs to sell product and lots of it. Unions only delay and short products. Mac Pros and servers could be made here and maybe some packaging.
post #17 of 34
Quote:
Originally Posted by SockRolid View Post

ARM-based MacBook Air by 2014.
$999.00 -> top of the line quad-core Intel Core i7.
$17.50 -> dual-core 32-bit ARM-based A6X.
$??.?? -> quad-core 64-bit ARM-based AX?
Let's say the 2014 quad-core 64-bit ARM-based AX SoC costs Apple a whopping $50 each. That's hundreds less than the equivalent Intel chip. And that savings should more than make up the difference in total cost per MBA.
"Won't run Windows," you say? Well the MacBook Pro could keep the red-hot Intel chip just for the die-hards that need to run pro applications. A dying breed.

 

Here's a bit of news for you: Many enterprise customers buy the MBA and boot it under Windows. 

 

Furthermore Apple is not likely to confuse its customers like Microsoft did by offering two versions of same-named OS on the same-named product.

 

This is not to ay that Apple may release a product that more resembles a thin laptop with an ARM chip inside. After all, a super light weight laptop with a real keyboard might appeal to a segment of the market. 

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post #18 of 34
Because Caucasians are Just Too Damned Tall

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post #19 of 34
Quote:
Originally Posted by SockRolid View Post

ARM-based MacBook Air by 2014.
$999.00 -> top of the line quad-core Intel Core i7.
$17.50 -> dual-core 32-bit ARM-based A6X.
$??.?? -> quad-core 64-bit ARM-based AX?
Let's say the 2014 quad-core 64-bit ARM-based AX SoC costs Apple a whopping $50 each. That's hundreds less than the equivalent Intel chip. And that savings should more than make up the difference in total cost per MBA.
"Won't run Windows," you say? Well the MacBook Pro could keep the red-hot Intel chip just for the die-hards that need to run pro applications. A dying breed.

Thanks to Windows 8, and Microsoft's newfound love of Windows on ARM, the "won't run Windows" conceit may be what is dying.

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post #20 of 34
It is probably Mac Pro due to the amount, Apple could have all there Mac desktops in America eventually yet I doubt that it would be there mobile devices.
post #21 of 34
Quote:
Originally Posted by Curtis Hannah View Post

It is probably Mac Pro due to the amount, Apple could have all there Mac desktops in America eventually yet I doubt that it would be there mobile devices.

In the interview Cook said one of their current Mac lines would be made in the US next year. My first thought is the Mac Pro but since the new iMac is currently being assembled in the US I wonder if that means that the motherboard and other parts will also be built in the US, not just the final assembly.

Cook also stated that their iPhone SoCs and Gorilla Glass are made in the US. Well, he didn't actually say SoC so I guess it could be part of the SoC.

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post #22 of 34
I get all my socs at Walmart these days but I think they're knitted in China. 1wink.gif
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post #23 of 34
Quote:
Originally Posted by SockRolid View Post

ARM-based MacBook Air by 2014.
$999.00 -> top of the line quad-core Intel Core i7.
$17.50 -> dual-core 32-bit ARM-based A6X.
$??.?? -> quad-core 64-bit ARM-based AX?
Let's say the 2014 quad-core 64-bit ARM-based AX SoC costs Apple a whopping $50 each. That's hundreds less than the equivalent Intel chip. And that savings should more than make up the difference in total cost per MBA.
"Won't run Windows," you say? Well the MacBook Pro could keep the red-hot Intel chip just for the die-hards that need to run pro applications. A dying breed.


This isn't a good comparison at all. Sometimes your comments are just nauseating. Apple never used the $999 chips.  Intel's listed prices do not reflect Apple's costs, so they can't be directly compared to cost estimates on ARM chips. The chips 2.3 and 2.6 chips used in the standard quad core 15" macbook pro configurations are listed at $378. You can cto the 2.7 which is listed as $568. Given that these are far more powerful than any ARM chip, I don't see why you're comparing with the $1000 mark. Intel makes server processors too, some of which cost several thousand, and you can't use them in your ipad. The real stupidity here is that you're calling these "equivalent" chips. They're not equivalent at all. Intel does run on significantly higher margins, but that is a completely different issue.

post #24 of 34
What a stupid headline and premise. Once Foxconn decides to enter the US, they will set up a legal US entity, buy or build a US manufacturing facility, hire US workers and managers, and build American products. All making them a US company. So what is the point?
post #25 of 34

There are Americans with small hands also.Where there is a will there is a way.
 

post #26 of 34
Quote:
Originally Posted by FreeRange View Post

What a stupid headline and premise. Once Foxconn decides to enter the US, they will set up a legal US entity, buy or build a US manufacturing facility, hire US workers and managers, and build American products. All making them a US company. So what is the point?

 

Yes, the reason to want manufacturing in this country, is not to enrich American companies, which are doing just fine, it's to employ American workers, who aren't doing so well.

post #27 of 34
So is Apple bringing the jobs back to the USA or is Foxconn? Clarification?
post #28 of 34
Quote:
Originally Posted by sr2012 View Post

So is Apple bringing the jobs back to the USA or is Foxconn? Clarification?

Depends on your tilt. I'd say the most appropriate answer is both in this is clearly a joint effort from both companies. If you break it down I'd word it as Apple is bringing jobs back to the US but Foxconn is creating jobs in the US; the difference being only one company is from US.

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post #29 of 34
Quote:
Originally Posted by SolipsismX View Post

Depends on your tilt. I'd say the most appropriate answer is both in this is clearly a joint effort from both companies. If you break it down I'd word it as Apple is bringing jobs back to the US but Foxconn is creating jobs in the US; the difference being only one company is from US.

Fair enough.
post #30 of 34
Nothing can be perfect. If Apple helps brings jobs back here. I'll be happy.
post #31 of 34
Which
Quote:
Originally Posted by anonymouse View Post

Quote:
Originally Posted by FreeRange View Post

What a stupid headline and premise. Once Foxconn decides to enter the US, they will set up a legal US entity, buy or build a US manufacturing facility, hire US workers and managers, and build American products. All making them a US company. So what is the point?

Yes, the reason to want manufacturing in this country, is not to enrich American companies, which are doing just fine, it's to employ American workers, who aren't doing so well.
Which isn't really true either. American workers are doing very well compared to someplaces in this world. The big problem is that many workers have abandoned traditional American work ethic and have enlisted with the Democrats to become leaches upon the working majority. In effect they have made them selves un employable.

Now many on these forums won't like that statement but tough luck, I actually work in manufacturing in the US and see clearly just how big of a problem this has become.
post #32 of 34
Quote:
Originally Posted by Winter View Post

Nothing can be perfect. If Apple helps brings jobs back here. I'll be happy.

I hope people won't be shocked when it is found out that the jobs are entry level paying $9.00 an hour with little in the way of benefits. Don't get me wrong it wouldn't hurt one bit to have a bit of new manufacturing in the US, I just think some are looking at this through rosé color glasses. If Apples motivation is political then frankly they are making a huge mistake and locating in Detroit would highlight the depth of the mistake. On the other hand if this is a well planed and executed move to diversify manufacturing then they will probably succeed without much effort. Of course success demands locating in an area without the problems of Detroit or Michigan in general.
post #33 of 34
MacRumors has an article from Fortune which is guessing it will be the MacPro and employ around 200 jobs (based on the $100 million figure). But I think people are misinterpreting what Cook said. He said Apple was putting $100 million towards the project. Apple's not building their own manufacturing plant. The $100 million will go to Foxconn or whoever is doing the manufacturing. I think the MacPro is a good guess but I think it's kind of tough to estimate how many jobs this will create based on so little information. And it wouldn't surprise me if the media is low balling it to make it come across as a PR move more than anything else.
post #34 of 34
Quote:
Originally Posted by wizard69 View Post

I hope people won't be shocked when it is found out that the jobs are entry level paying $9.00 an hour with little in the way of benefits. Don't get me wrong it wouldn't hurt one bit to have a bit of new manufacturing in the US, I just think some are looking at this through rosé color glasses. If Apples motivation is political then frankly they are making a huge mistake and locating in Detroit would highlight the depth of the mistake. On the other hand if this is a well planed and executed move to diversify manufacturing then they will probably succeed without much effort. Of course success demands locating in an area without the problems of Detroit or Michigan in general.
Right now we have little information to go off of. Everything we're hearing is pure speculation. And I don't trust the media when it comes to Apple. If they want to spin this as as a PR move and nothing more they will. And they'll easily be able to find some "manufacturing expert" to pull a number out of his arse (like 200) making it look completely insignificant.
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