Apple investing record $10.5 billion in supply chain robots & machinery

Posted:
in General Discussion edited January 2014
More of Apple's assembly processes for devices like the iPhone and iPad will be accomplished by machines and robots, thanks to a $10.5 billion investment in manufacturing planned by the company over the next year.

iPhone 5c
One side of steel reinforcement assembly being installed on the iPhone 5c.


Details on Apple's major expense were revealed on Wednesday by Bloomberg, which detailed how the new equipment will be used for tasks such as polishing the plastic case on the iPhone 5c and testing camera lenses on iPhone and iPad models. Details of the new manufacturing methods were revealed by anonymous sources, though the company's financial commitment was revealed in its annual capital expenditure report last month.

The sources reportedly revealed that Apple is striking exclusive machinery deals, outspending rival technology companies to give the Cupertino, Calif.-based corporation a leg up on the competition.

The report suggested that Apple's manufacturing process, which is a key area of interest for Chief Executive Tim Cook, has "taken on heightened urgency." Cook is known for being an expert in managing Apple's supply chain.

In all, Apple disclosed to the U.S. Securities and Exchange Commission that it plans to spend about $11 billion on capital expenditures in 2014. That's up considerably from 2013, when Apple spent $7 billion -- $6.5 billion of that on items such as product tooling and manufacturing process equipment -- according to its 10-K filing.



Wednesday's report revealed that after Apple's industrial design team, led by chief designer Jony Ive, comes up with a product idea, they then work with the company's hardware engineering group. Together, the teams develop large-scale methods for getting products with unique designs built.

"Apple engineers often spend weeks at facilities in Asia making sure the parts and equipment they buy or make are working properly," reporter Adam Satariano revealed.

The company has in the past built custom equipment to test new features, such as the motion-sensing advanced gyroscopes the company introduced in 2010 with the iPhone 4. According to Bloomberg, that feature was tested with an Apple invention involving a granite base and cubes that spin multiple iPhones around 30 degrees. The machines had to be manufactured by Apple and then provided to suppliers in China to test iPhone 4 models as they were built.

Machine


Details on new and more advanced manufacturing processes from Apple come as the company was revelealed to have inked a $578 million deal with GT Advanced Technology for sapphire crystal protective material. Apple already uses scratch-resistant sapphire to cover its camera lens and Touch ID home button on the iPhone 5s.

And starting this year, Apple has even brought machinery into its own retail stores to automatically fix customers' iPhones. The advanced machine helps to simplify display calibration for Apple's retail employees, which one employee described as like "bringing China to the Genius Room," referring to the fact that iPhones are built in China by Foxconn.
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Comments

  • Reply 1 of 79
    It is baffling how Wall Street knocks this incredible American company. Apple just seems to really have its act together.
  • Reply 2 of 79
    LOL 10.5B in supply chain investment??? I thought that sales and demand for Apple products were trending downward despite quarter after quarter record sales. What a waste!

    /s
  • Reply 3 of 79
    rogifanrogifan Posts: 10,669member
    muadibe wrote: »
    It is baffling how Wall Street knocks this incredible American company. Apple just seems to really have its act together.
    Or when people claim what Apple is doing is no big deal because the processes are used in other industries. But the point is a lot of this stuff isn't done in the consumer electronics space and certainly not to the scale Apple does it.
  • Reply 3 of 79
    macxpressmacxpress Posts: 5,389member
    Quote:

    Originally Posted by muadibe View Post



    It is baffling how Wall Street knocks this incredible American company. Apple just seems to really have its act together.

     

    Well sometimes....

  • Reply 5 of 79
    asciiascii Posts: 5,936member
    They say Tim Cook is a genius at manufacture and logistics. And geniuses change things. Could he be The Man who brings Manufacturing back to the US?
  • Reply 6 of 79
    maestro64maestro64 Posts: 5,036member

    This could mean Apple maybe looking to become less dependent on Chinese labor intensive manufacturing. In China you can not automate something which can be done by a human. I have been inside factories over there where is was automated but, they still had people sitting at stations pushing buttons to execute the task. I asked why they actually needed a person to press the button and they answer always has been because china labor law required it.

     

    If Apple heavily automates they may not be able to use this technology in China, since China is about putting people to work. Yeah we all know they use a vision system to match displays with cases on the iPhone 5, but a human can not do that task, as they said they system is looking at 700+ variables to determine the correct fit, a human can not do this. 

  • Reply 7 of 79

    Just think how many Roomba's Apple will need for the new giant spaceship building?

     

    Let me be the first to use "iRobot" in a comment, just to get that out of the way.

  • Reply 8 of 79
    Quote:

    Originally Posted by ascii View Post



    They say Tim Cook is a genius at manufacture and logistics. And geniuses change things. Could he be The Man who brings Manufacturing back to the US?

     

    Yes, and he might lead the effort to keep robots from being unfairly discriminated against in the workplace.

  • Reply 9 of 79
    Quote:

    Originally Posted by ascii View Post



    They say Tim Cook is a genius at manufacture and logistics. And geniuses change things. Could he be The Man who brings Manufacturing back to the US?

    I think you may have hit the nail on the head as to what the legacy of Tim Cook is going to be.

  • Reply 10 of 79



    Apple released Iphone6 image.Did you see it?If not see here   http://imgdino.com/viewer.php?file=68880560336892107577.jpg

  • Reply 11 of 79
    asciiascii Posts: 5,936member
    Quote:
    Originally Posted by msimpson View Post

     

     

    Yes, and he might lead the effort to keep robots from being unfairly discriminated against in the workplace.


    Heh. Geniuses only change things within their field, and his isn't politics. But he might write a heartfelt editorial about the robots.

  • Reply 12 of 79

    Good for Apple in investment -- but folks, this is the scary bit about our future as employed people on this planet. Using the Capitalist model, the chance for "shovel ready" jobs to allow you to eat is scarcer than Unicorn wings. Even with some education, you are going to have to be more and more educated to be useful, and perhaps the limits of education and affording education will run smack into the reality of what most people can do. Once you drop off of the "clear path" to opportunity, you may never be able to get you or your children back on it.

     

    Frankly; we have nothing in our society or government that resolves the issue of "replaced by a robot." And when the "singularity hits" -- where computers can be 'as smart as' the average person, nothing but some form of Socialism would be able to deal with the issue.

     

    If we stay on the same path; most of us are not able to be useful enough to justify feeding us. Much less the environment surviving a "10% year over year" growth model. Communism is not supportable due to corruption, and Capitalism manages corruption but cannot support people or ecosystems and runs into a physical limit when there are not more people to exploit or more resources to use.

  • Reply 13 of 79
    Quote:

    Originally Posted by drewyboy View Post

     

    I think you may have hit the nail on the head as to what the legacy of Tim Cook is going to be.


     

    In the case of Apple; yes. But that's because they've got systems with enough cost and profit to justify capital investments. Until you get into the "billions of dollars" range with CPUs and Computer infrastructure -- a local company may not get over the hurdle. How many years of employment, for instance will it take for workers to equal the capital expenditure? 5 maybe 10?

     

    The only REAL way to bring manufacturing back to the US is to start adding tariffs again to imported goods and services. We've been taught that this ruins an economy. Which is why China and India have exceeded our growth doing all the things we were taught not to do.

  • Reply 14 of 79
    rogifanrogifan Posts: 10,669member
    Quote:

    Originally Posted by ascii View Post



    They say Tim Cook is a genius at manufacture and logistics. And geniuses change things. Could he be The Man who brings Manufacturing back to the US?

    Not sure how you got that from this story.  Most of Apple's advanced manufacturing is done in Asia.  I didn't see anything in this story that suggested Apple was planning to change that.

  • Reply 15 of 79
    mjtomlinmjtomlin Posts: 2,572member

    Yeah, it's too bad Apple is just a marketing company. /s

  • Reply 16 of 79
    Ok so this may sound incredibly dumb but why is apple investing 10 billion dollars in something it doesn't own what if these manufacturing companies use this investment against apple
  • Reply 17 of 79
    ascii wrote: »
    They say Tim Cook is a genius at manufacture and logistics. And geniuses change things. Could he be The Man who brings Manufacturing back to the US?

    You done broke the code!
  • Reply 18 of 79
    Good for Apple in investment -- but folks, this is the scary bit about our future as employed people on this planet. Using the Capitalist model, the chance for "shovel ready" jobs to allow you to eat is scarcer than Unicorn wings. Even with some education, you are going to have to be more and more educated to be useful, and perhaps the limits of education and affording education will run smack into the reality of what most people can do. Once you drop off of the "clear path" to opportunity, you may never be able to get you or your children back on it.

    Frankly; we have nothing in our society or government that resolves the issue of "replaced by a robot." And when the "singularity hits" -- where computers can be 'as smart as' the average person, nothing but some form of Socialism would be able to deal with the issue.

    If we stay on the same path; most of us are not able to be useful enough to justify feeding us. Much less the environment surviving a "10% year over year" growth model. Communism is not supportable due to corruption, and Capitalism manages corruption but cannot support people or ecosystems and runs into a physical limit when there are not more people to exploit or more resources to use.

    Only a fake Shatner would promote socialism.
  • Reply 19 of 79
    In the case of Apple; yes. But that's because they've got systems with enough cost and profit to justify capital investments. Until you get into the "billions of dollars" range with CPUs and Computer infrastructure -- a local company may not get over the hurdle. How many years of employment, for instance will it take for workers to equal the capital expenditure? 5 maybe 10?

    The only REAL way to bring manufacturing back to the US is to start adding tariffs again to imported goods and services. We've been taught that this ruins an economy. Which is why China and India have exceeded our growth doing all the things we were taught not to do.

    General purpose robots are not far off in the future and their appearance will presage the rise of highly capable artificial intelligence systems. We are just beginning to see some of this now. The fact is that both labor and manufacturing costs will continue to fall as computation continues to integrate and improve both facets of production. I predict much of manufacturing's labor performed by people will be replaced with general purpose robots over the next 10-20 years. The labor movement as a political force will be over.
  • Reply 20 of 79
    Quote:
    Originally Posted by ascii View Post



    They say Tim Cook is a genius at manufacture and logistics. And geniuses change things. Could he be The Man who brings Manufacturing back to the US?

    The robotics are getting smaller every year and more intelligent that eventually, it's cheaper and more efficient to have robots that does the work better and more consistent than humans. You don't even have to feed them, limit them by the hours, pay raises, or anything like that. They'll do the work 24x7 happily. 

     

    Even Foxconn said they're planning to replacing their human workforce with a million robots in a few years. Canon's already working on a fully automated factory that won't require any human workers. 

     

    If Tim Cook brings back manufacturing to US, it won't be of any benefits to the US's workforce, it'd just be to reduce manufacturing costs and to maintain their high level of secrecy. 

     

     

    Quote:
    Originally Posted by Rogifan View Post

     

    Not sure how you got that from this story.  Most of Apple's advanced manufacturing is done in Asia.  I didn't see anything in this story that suggested Apple was planning to change that.


     

    The core reason is because the current manufacturing still require a lot of humans to work on it, the locations in China are still cheaper with tax versus in US. 



    Once the robotics takes over, there's no reason to keep them in Asia beside the tax rates. If the states in US want to earn some profit, they'll do everything they can to get Apple in US and they're doing it already. If they can lower tax rates to even with China or even cheaper, Apple'll do it. 

    Quote:
    Originally Posted by mixinmaster23 View Post



    Ok so this may sound incredibly dumb but why is apple investing 10 billion dollars in something it doesn't own what if these manufacturing companies use this investment against apple

    They do own it, they own the patents to anything they invent. They're just leasing them in Asia because it's cheaper there and the companies will pony up something in exchange to using Apple's tooling. In addition, there's nobody in US that'll do this, so Apple have no choice but to invest there. 

     

    Apple isn't stupid, they'll have all sorts of agreements that's iron clad. There's a reason that there's no other company that have the same unibody construction that Apple had for more than half a decade. There are some companies that are close to doing it but that's because they're doing it on their own, not using Apple's inventions. 

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