Of course Apple wouldn't [buy out all of its competitors]. The whole point of this is to demonstrate exactly how much cash Apple have.
But the report doesn't say that. The report also suggests virtually unlimited growth by Apple ("Apple's cash will continue to grow dramatically"), which is also ridiculous.
All of this is obvious, sure, but a balanced report would demand its inclusion.
Couldn't agree more. Be a real leader. Being jobs home. Period.
Talk about something you could brag about.
"Jobs bring jobs..." Does a headline get any better than this?
This boat sailed away LONG AGO.
The loss of profits is the least of Apple's concerns in moving jobs back.
The lack of infrastructure, the impossibility of scaling to the extent companies like Foxconn have in less than a decade, and the absolute lack of any institutional knowledge on how to manufacture products like these at the scale the Chinese do is an absolute killer.
What the Chinese firms have is not just cheap labor (initially that was indeed the case) but rather 30+ years of investment in infrastructure (both in terms of the manufacturing facilities themselves, as well as government provided infrastructure, like easy access to plentiful and stable power and water) and over 30 years of experience and knowledge in building products at this scale.
The only way Apple could pull this off is if they created a new product which they KNOW will not sell in the millions (kinda like the iPod Boombox), which they built in the US, and then spent the next 10-15 years trying to expand those facilities (and even then, reaching Foxconn like scales will be close to impossible).
Finally, over those 10-15 years, the Asian markets combined will probably be a much larger market for Apple, merely because of the large number of people there and the growing middle classes in China and India.
That boat has sailed folks. It is literally impossible for Apple to move production back to the US, even if they were willing to lose 10's of billions of dollars on it.
They have huge margins, huge cash reserves, and it's not because they manufacture in China, it's because they make better products.
And a big part of why they make better products is their relationship with Foxconn. Apple came to realize that while they had tremendous skills in design they didn't have a good handle on controlling manufacturing processes and that there were other firms out there who did. Working with Foxconn they outsourced their manufacturing while producing products with incredible build quality and remarkably low prices.
Apple sell tremendous quantities of their product outside the USA, in Europe and in Asia particularly. Do you think we are going to pay more for a 'made in USA' sign? Are you willing to pay more for a German made TV?
Apple isn't a charity, it's a business. It's contribution to the world is in making beautiful products that enrich our lives, not in enriching one set of manufacturing workers over another.
It would also reduce higher skilled jobs because Apple products would get even more expensive, and fewer people would buy them. Apple would then have to lay off people working in the US. It may be a net increase in job creation, but it's questionable whether the US would be better off for it (tax revenue, productivity value, etc)
BTW, there are lots of jobs out there. It's just that people are unwilling to do them. How many unemployed people are willing to be janitors or field workers because it is beneath them, or their skillset is too high?
While your first paragraph is possibly correct, the second one is wrong.
There are 5 job seekers for every job opening in the market currently. So no, it isn't just a problem of people unwilling to do jobs "beneath" them.
For all of the weeping and wailing and gnashing of teeth over the manufacturing employment decline there are a few things to keep in mind:
1. I'm fairly certain there was the same angst when agricultural employment dropped (over the years) from about 90% of the workforce to about 5%) while we maintained the ability to produce enough food to feed the US and other nations.
2. There's nothing particularly magical or special about manufacturing as a job.
3. A big part of the reason for manufacturing employment reduction, bigger than outsourcing I've read, is productivity improvement (chiefly through technology and automation). The average individual manufacturing worker produces about 3X as much as they did like 40 years ago.
Me too z3r0. ARM Holdings' market cap is less than $7.5 billion now. That's a huge amount of money in one sense, considering Apple only paid $278 million for PA Semi. But ARM-based designs are crucial to Apple now (and presumably in the long term) so it's a steal. And $7.5 billion for ARM would be a far better investment than say, $8.5 billion for Skype. (Just couldn't resist that one.)
What advantage would ARM provide Apple? ARM is nothing but the owner of various intellectual properties which Apple can easily (and currently does) licence. (Interesting aside...ARM is essentially nothing more than what our favorite "open" fanbois like to call a "patent troll"). Buying ARM would give Apple no competitive advantage over what they have now.
The only way they could use it as a competitive advantage is if Apple stopped licencing ARM designs to other manufacturers, but that would put Apple into a legal and regulatory hell-hole which I doubt they want to enter.
But the report doesn't say that. The report also suggests virtually unlimited growth by Apple ("Apple's cash will continue to grow dramatically"), which is also ridiculous.
All of this is obvious, sure, but a balanced report would demand its inclusion.
The report does say could buy out, not should, or will.
The other stat was that Apple had 75% of the profits of the industry. If sales of smartphone's double in 4 years ( IDC's cautious estimate), and Apple's keeps those margins, it will increase it's cash reserves dramatically. I think the original report said to 130B.
Really? So you figure that manufacturing in the US would have cost them 70 billion over the last decade? I don't have their production costs, but looking at how Jobs set up the NeXT manufacturing, I'm not sure I buy that they'd have to fold up shop and just give away their money. They have huge margins, huge cash reserves, and it's not because they manufacture in China, it's because they make better products.
Emphasis on the tense.
1) Apple would almost certainly have been dead in the water if they were manufacturing in the US in the late 90's when Michael Dell infamously said that Steve Jobs should simply give the money back to the shareholders.
2) Apple has built its cash reserve in a ridiculously short period of time. Basically, in the past 4 years since the creation of the iPhone (and now the iPad). I think very few grasp how extraordinary Apple's growth has been (we have seen more extraordinary growth in stock prices, but those have only been bubbles. This is clearly not one, since the growth is in their actual cash positions, not market values).
3) There is no certainty that this will last. I am sure people were saying similar things about Microsoft in the 90s, and now the company is considered "beleagured". Apple is in an even more preacrious position because MS dominated the enterprise market, which is extremely conservative, while Apple plays in the consumer market, which is far more fickle. Besides, Apple has no monopoly like MS does (the closest is the iPod, but that is a dying market). Apple could very well lose it all.
I think Apple should buy ARM and ATT. It's a win-win situation. That way, Apple will have their own custom chip and cellular business. Sweet dominator.
I think Apple should buy ARM and ATT. It's a win-win situation. That way, Apple will have their own custom chip and cellular business. Sweet dominator.
What good would either do? What is gained? Why would a manufacturer want a carrier in one country only- and what "synergy" would work here. If they bought AT&T they have to make it exclusive and not work with other manufacturers, which will destroy half it's business.
Nokia would make sense, for the patents, and some of the manufacturing, carrier goodwill, supply chain expertise. They can churn out phones, unlike Apple. But even that makes not that much sense.
Regarding overseas manufacturing, I think if the US had a more capitalist economy, there would be more innovation and work to do than anyone could manage. There would be like 10 Apples.
Regarding overseas manufacturing, I think if the US had a more capitalist economy, there would be more innovation and work to do than anyone could manage. There would be like 10 Apples.
Really? The evidence is that capitalists are sending jobs over-seas. Although I dont agree with the solutions presented here, certainly no single company can afford to build in the US, the problems are very real and they are the problems of capitalism and globalisation. Capital follows cheap labour.
Why do you assume the products would get more expensive? You don't think profit margins could be slightly reduced and that the company would be just fine? I'm not singling Apple out here, btw., if you're going to buy a computer it may as well be theirs given that everyone manufactures overseas, but that doesn't mean it wouldn't be nice if the sticker said 'Designed and Manufactured by Apple in the USA'.
Seriously?
Apple contracts 400,000 people... at one single factory in China. Total employment is around 1,000,000 people. Where in the U.S. do you propose to put that? What do you think wages will be when you try to hire that many people in a metro area? And do you really think you'll avoid unionization?
However "nice" it would be, we're talking about the difference between paying $2/hour and paying $50/hour for labor, even if you could find 400,000 workers in one place (unless you want to get rid of economies of scale, too, and just plunk a few thousand here, a few thousand there).
Your heart is in the right place. But you don't understand the sheer scale of the operation. This isn't about whether a new car factory employs 2,000 people in Alabama or Seoul.
Manufacturing on this scale doesn't work in any highly developed economy. It would be "nice" if it did. But you might as well wish for magic unicorns.
unless you are one of the many Americans who could use a job to help pay for rent, mortgage, college, health care needs? Not everyone needs a super high paying job, sometimes just a job that pays will do!
The loss of profits is the least of Apple's concerns in moving jobs back.
The lack of infrastructure, the impossibility of scaling to the extent companies like Foxconn have in less than a decade, and the absolute lack of any institutional knowledge on how to manufacture products like these at the scale the Chinese do is an absolute killer.
Not to mention the dominance of consumer apathy on the issue and their desire for cheap gadgets. That and building manufacturing to adequately compete with a place like Foxconn is a long term extremely expensive proposition with no guarantees that it will work. That's the last things investors want to see - their investments are focused on the short term and on making as much money as possible.
As asdasd said:
Quote:
not going to happen. I think that if American jobs are to come "home' Governments in the West have to force the issue with protectionist measures. Even that would collapse the economy for while. It is a problem, but there are no solutions.
That's about the only thing that can change the mentality - the government has to create an environment where it is much more financially viable for companies to produce locally than it is to import. That is very difficult thing to do and I wager almost impossible given the influence that large multi-national corporations have with our politicians. They can just buy their success.
Comments
That won't happen.
A-greed.
Of course Apple wouldn't [buy out all of its competitors]. The whole point of this is to demonstrate exactly how much cash Apple have.
But the report doesn't say that. The report also suggests virtually unlimited growth by Apple ("Apple's cash will continue to grow dramatically"), which is also ridiculous.
All of this is obvious, sure, but a balanced report would demand its inclusion.
Couldn't agree more. Be a real leader. Being jobs home. Period.
Talk about something you could brag about.
"Jobs bring jobs..." Does a headline get any better than this?
This boat sailed away LONG AGO.
The loss of profits is the least of Apple's concerns in moving jobs back.
The lack of infrastructure, the impossibility of scaling to the extent companies like Foxconn have in less than a decade, and the absolute lack of any institutional knowledge on how to manufacture products like these at the scale the Chinese do is an absolute killer.
What the Chinese firms have is not just cheap labor (initially that was indeed the case) but rather 30+ years of investment in infrastructure (both in terms of the manufacturing facilities themselves, as well as government provided infrastructure, like easy access to plentiful and stable power and water) and over 30 years of experience and knowledge in building products at this scale.
The only way Apple could pull this off is if they created a new product which they KNOW will not sell in the millions (kinda like the iPod Boombox), which they built in the US, and then spent the next 10-15 years trying to expand those facilities (and even then, reaching Foxconn like scales will be close to impossible).
Finally, over those 10-15 years, the Asian markets combined will probably be a much larger market for Apple, merely because of the large number of people there and the growing middle classes in China and India.
That boat has sailed folks. It is literally impossible for Apple to move production back to the US, even if they were willing to lose 10's of billions of dollars on it.
They have huge margins, huge cash reserves, and it's not because they manufacture in China, it's because they make better products.
And a big part of why they make better products is their relationship with Foxconn. Apple came to realize that while they had tremendous skills in design they didn't have a good handle on controlling manufacturing processes and that there were other firms out there who did. Working with Foxconn they outsourced their manufacturing while producing products with incredible build quality and remarkably low prices.
Apple sell tremendous quantities of their product outside the USA, in Europe and in Asia particularly. Do you think we are going to pay more for a 'made in USA' sign? Are you willing to pay more for a German made TV?
Apple isn't a charity, it's a business. It's contribution to the world is in making beautiful products that enrich our lives, not in enriching one set of manufacturing workers over another.
It would also reduce higher skilled jobs because Apple products would get even more expensive, and fewer people would buy them. Apple would then have to lay off people working in the US. It may be a net increase in job creation, but it's questionable whether the US would be better off for it (tax revenue, productivity value, etc)
BTW, there are lots of jobs out there. It's just that people are unwilling to do them. How many unemployed people are willing to be janitors or field workers because it is beneath them, or their skillset is too high?
While your first paragraph is possibly correct, the second one is wrong.
There are 5 job seekers for every job opening in the market currently. So no, it isn't just a problem of people unwilling to do jobs "beneath" them.
1. I'm fairly certain there was the same angst when agricultural employment dropped (over the years) from about 90% of the workforce to about 5%) while we maintained the ability to produce enough food to feed the US and other nations.
2. There's nothing particularly magical or special about manufacturing as a job.
3. A big part of the reason for manufacturing employment reduction, bigger than outsourcing I've read, is productivity improvement (chiefly through technology and automation). The average individual manufacturing worker produces about 3X as much as they did like 40 years ago.
A-greed.
Cute.
Me too z3r0. ARM Holdings' market cap is less than $7.5 billion now. That's a huge amount of money in one sense, considering Apple only paid $278 million for PA Semi. But ARM-based designs are crucial to Apple now (and presumably in the long term) so it's a steal. And $7.5 billion for ARM would be a far better investment than say, $8.5 billion for Skype. (Just couldn't resist that one.)
http://uk.finance.yahoo.com/q?s=ARM.L
What advantage would ARM provide Apple? ARM is nothing but the owner of various intellectual properties which Apple can easily (and currently does) licence. (Interesting aside...ARM is essentially nothing more than what our favorite "open" fanbois like to call a "patent troll"). Buying ARM would give Apple no competitive advantage over what they have now.
The only way they could use it as a competitive advantage is if Apple stopped licencing ARM designs to other manufacturers, but that would put Apple into a legal and regulatory hell-hole which I doubt they want to enter.
But the report doesn't say that. The report also suggests virtually unlimited growth by Apple ("Apple's cash will continue to grow dramatically"), which is also ridiculous.
All of this is obvious, sure, but a balanced report would demand its inclusion.
The report does say could buy out, not should, or will.
The other stat was that Apple had 75% of the profits of the industry. If sales of smartphone's double in 4 years ( IDC's cautious estimate), and Apple's keeps those margins, it will increase it's cash reserves dramatically. I think the original report said to 130B.
Really? So you figure that manufacturing in the US would have cost them 70 billion over the last decade? I don't have their production costs, but looking at how Jobs set up the NeXT manufacturing, I'm not sure I buy that they'd have to fold up shop and just give away their money. They have huge margins, huge cash reserves, and it's not because they manufacture in China, it's because they make better products.
Emphasis on the tense.
1) Apple would almost certainly have been dead in the water if they were manufacturing in the US in the late 90's when Michael Dell infamously said that Steve Jobs should simply give the money back to the shareholders.
2) Apple has built its cash reserve in a ridiculously short period of time. Basically, in the past 4 years since the creation of the iPhone (and now the iPad). I think very few grasp how extraordinary Apple's growth has been (we have seen more extraordinary growth in stock prices, but those have only been bubbles. This is clearly not one, since the growth is in their actual cash positions, not market values).
3) There is no certainty that this will last. I am sure people were saying similar things about Microsoft in the 90s, and now the company is considered "beleagured". Apple is in an even more preacrious position because MS dominated the enterprise market, which is extremely conservative, while Apple plays in the consumer market, which is far more fickle. Besides, Apple has no monopoly like MS does (the closest is the iPod, but that is a dying market). Apple could very well lose it all.
Couldn't agree more. Be a real leader. Being jobs home. Period.
Talk about something you could brag about.
"Jobs bring jobs..." Does a headline get any better than this?
Yeah and with the prices and quality that would bring there wouldn't any iPhone in the market place and no cash.
Stop dreaming and start buying what is already manufactured here, cars, food, etc. I bet some of you dreamers drive around in foreign cars...right?
I think Apple should buy ARM and ATT. It's a win-win situation. That way, Apple will have their own custom chip and cellular business. Sweet dominator.
Or they could manufacture their products in the US and create some jobs.
Manufacturing is mechanical labor: it has to go to China and robots. America should concentrate on creative work, inventions and innovations.
Insane...
I think Apple should buy ARM and ATT. It's a win-win situation. That way, Apple will have their own custom chip and cellular business. Sweet dominator.
What good would either do? What is gained? Why would a manufacturer want a carrier in one country only- and what "synergy" would work here. If they bought AT&T they have to make it exclusive and not work with other manufacturers, which will destroy half it's business.
Nokia would make sense, for the patents, and some of the manufacturing, carrier goodwill, supply chain expertise. They can churn out phones, unlike Apple. But even that makes not that much sense.
Regarding overseas manufacturing, I think if the US had a more capitalist economy, there would be more innovation and work to do than anyone could manage. There would be like 10 Apples.
Really? The evidence is that capitalists are sending jobs over-seas. Although I dont agree with the solutions presented here, certainly no single company can afford to build in the US, the problems are very real and they are the problems of capitalism and globalisation. Capital follows cheap labour.
Why do you assume the products would get more expensive? You don't think profit margins could be slightly reduced and that the company would be just fine? I'm not singling Apple out here, btw., if you're going to buy a computer it may as well be theirs given that everyone manufactures overseas, but that doesn't mean it wouldn't be nice if the sticker said 'Designed and Manufactured by Apple in the USA'.
Seriously?
Apple contracts 400,000 people... at one single factory in China. Total employment is around 1,000,000 people. Where in the U.S. do you propose to put that? What do you think wages will be when you try to hire that many people in a metro area? And do you really think you'll avoid unionization?
However "nice" it would be, we're talking about the difference between paying $2/hour and paying $50/hour for labor, even if you could find 400,000 workers in one place (unless you want to get rid of economies of scale, too, and just plunk a few thousand here, a few thousand there).
Your heart is in the right place. But you don't understand the sheer scale of the operation. This isn't about whether a new car factory employs 2,000 people in Alabama or Seoul.
Manufacturing on this scale doesn't work in any highly developed economy. It would be "nice" if it did. But you might as well wish for magic unicorns.
This boat sailed away LONG AGO.
The loss of profits is the least of Apple's concerns in moving jobs back.
The lack of infrastructure, the impossibility of scaling to the extent companies like Foxconn have in less than a decade, and the absolute lack of any institutional knowledge on how to manufacture products like these at the scale the Chinese do is an absolute killer.
Not to mention the dominance of consumer apathy on the issue and their desire for cheap gadgets. That and building manufacturing to adequately compete with a place like Foxconn is a long term extremely expensive proposition with no guarantees that it will work. That's the last things investors want to see - their investments are focused on the short term and on making as much money as possible.
As asdasd said:
not going to happen. I think that if American jobs are to come "home' Governments in the West have to force the issue with protectionist measures. Even that would collapse the economy for while. It is a problem, but there are no solutions.
That's about the only thing that can change the mentality - the government has to create an environment where it is much more financially viable for companies to produce locally than it is to import. That is very difficult thing to do and I wager almost impossible given the influence that large multi-national corporations have with our politicians. They can just buy their success.