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

Posted:
in Future Apple Hardware edited January 2014
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.
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Comments

  • Reply 1 of 33
    jblongzjblongz Posts: 146member
    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.
  • Reply 2 of 33


    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?"

  • Reply 3 of 33
    ifij775ifij775 Posts: 470member
    Robots. Apple will save money on shipping and labor costs
  • Reply 4 of 33
    Will they be able to reuse the shipping containers, that they import the workers in, as living quarters?
  • Reply 5 of 33
    solipsismxsolipsismx Posts: 19,566member
    A bit off topic but here are two videos showing US production of the first Mac and NeXT workstations...


    [LIST]
    [*] Apple, 1983 ::

    [*] NeXT, 1988(?) ::
    [/LIST]

    The quality between the video production is quite evident.
  • Reply 6 of 33
    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
  • Reply 7 of 33
    charlitunacharlituna Posts: 7,198member
    jblongz wrote: »
    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
  • Reply 8 of 33
    charlitunacharlituna Posts: 7,198member
    ifij775 wrote: »
    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
  • Reply 9 of 33

    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. 

  • Reply 10 of 33


    Another soft, doughy spot for Mike Daisey to exploit.

  • Reply 11 of 33
    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.
  • Reply 12 of 33
    MacProMacPro Posts: 17,905member
    starbird73 wrote: »
    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
  • Reply 13 of 33
    MacProMacPro Posts: 17,905member
    charlituna wrote: »
    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.
  • Reply 14 of 33
    sockrolidsockrolid Posts: 2,788member
    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.
  • Reply 15 of 33
    zompzomp Posts: 49member
    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.
  • Reply 16 of 33

    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. 

  • Reply 17 of 33
    Because Caucasians are Just Too Damned Tall

  • Reply 18 of 33
    sockrolid wrote: »
    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.
  • Reply 19 of 33
    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.
  • Reply 20 of 33
    solipsismxsolipsismx Posts: 19,566member
    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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