Coffeehouse Thread

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Apple to start manufacturing in the US

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  • GoddersUK

    Just caught this little nugget over on the BBC (something that has been discussed here before).

    It's interesting that he attributes not manufacturing in the US to lack of skills rather than cost - having worked on a PC assembly line in the past I can tell you that you can pick up all the basic skills in under a day and be pretty efficient in less than a couple of weeks. (Although it could be that they're doing something more sophisticated than assembly...)

    Nevertheless, I can certainly see the logic in the decision - it shifts manufacturing nearer to (a large segment of) the consumer base and some of the component supply.

  • elmer

    For a company that values secrecy and new product impact so highly, perhaps Apple are re-evaluating the total cost of reduced IP control, that comes with outsourcing. Just the other day, blogs were showing photos of a supposed iPhone 5s back-shell which, if real, could only have come from the outsourcing plant working on it.

  • gcorcoran

    I doubt american children are willing to work over 40 hours a week.

  • Maddus Mattus

    What would the iPad cost when manufactured in the US?

  • Ray7

    They've already started. The new iMac is being assembled in the USA.

     

     

     

     

  • Ray7

    , elmer wrote

    For a company that values secrecy and new product impact so highly, perhaps Apple are re-evaluating the total cost of reduced IP control, that comes with outsourcing. Just the other day, blogs were showing photos of a supposed iPhone 5s back-shell which, if real, could only have come from the outsourcing plant working on it.

    And it's not just the secrecy. If people start thinking that an iPhone5s is just around the corner, then sales of the iPhone5 will dry up.

     

  • Ray7

    , Maddus Mattus wrote

    What would the iPad cost when manufactured in the US?

    Depends how they do it.

    http://money.cnn.com/magazines/fortune/fortune_archive/1990/02/26/73121/index.htm

    I think they've got a lot more manufacturing R&D to do before they're ready to build the iPads in the US.

  • spivonious

    , Maddus Mattus wrote

    What would the iPad cost when manufactured in the US?

    I think Apple could lower the markup a bit. What is it now, 800%?

  • Ray7

    , spivonious wrote

    *snip*

    I think Apple could lower the markup a bit. What is it now, 800%?

    It's reckoned to be about 50%, but there's no way of knowing for sure because no one knows what kind of deals Apple gets on buying components in such large quantities.

  • Maddus Mattus
  • JohnAskew

    PCs have been made in the USA forever.

    They don't cost extra.

  • Maddus Mattus

    @JohnAskew:

    LOL, ofcourse they don't 'cost extra'. They could be manifactured cheaper. But I don't think the PC price would benefit from the added shipping costs. The reason why Apple can outsource, all their products are the same. With a DELL you can select so many different configurations, that the added shipping costs outweigh the benefits of outsourcing.

  • GoddersUK

    @Maddus Mattus: And a faster response time to customer orders as well as shipping cost benefits (for customised units). Most/all of the actual components are manufactured in the far east and you just assemble them to order (at least that's how they do it at RM). I remember having to remove an insane number of power supplies from PC cases that had had faulty PSUs installed in China - but it was cheaper for the Chinese OEM to send RM a load of new PSUs and pay for them to employ us to switch them then to ship the cases back to China.

    Of course, in the UK, we also benefit from open borders with a cheap eastern European labour force... Wink

  • JohnAskew

    , Maddus Mattus wrote

    @JohnAskew:

    LOL, ofcourse they don't 'cost extra'. They could be manifactured cheaper. But I don't think the PC price would benefit from the added shipping costs. The reason why Apple can outsource, all their products are the same. With a DELL you can select so many different configurations, that the added shipping costs outweigh the benefits of outsourcing.

    So you're saying Apple intends to raise their prices for iWhatever by $400 ?

    Do you think that's the type of thinking that made Apple into the largest corporation ever?

    Lump your +$400 statement into "the sky is falling" mantra that's in your bag of conservative talking points.

  • GoddersUK

    @JohnAskew:No they've rationalised it by pointing out that it's nearer their customer base and certain important components of their supply chain as well as having marketing benefits (that probably could allow them a price rise...).

    I imagine, in the medium-term future, as globalisation takes off and geographically related inequality subsides we'll see manufacturing become distributed among the consumer bases (i.e. rather than shipping devices around the world from a factory in China they'll have many smaller factories in the Americas, Europe, Africa, Asia and so on).

  • Harlequin

    I don't think it's just the low wages that helps Apple keep their costs and pricing down. It's because everything is built in the same area, or at least close by. Screens, brackets, drives, chips, screws...the transportation costs are low because they're all done close by. If you have screws built in Russia, brackets built in Dubai, screens built in Kyoto, cases built in Idaho...the prices go up because of the supply lines.

  • ScanIAm

    , gcorcoran wrote

    I doubt american children are willing to work over 40 hours a week.

    With children, you don't have to ask.  You can leverage their smaller size and lack of power against them.

  • GoddersUK

    , Harlequin wrote

    I don't think it's just the low wages that helps Apple keep their costs and pricing down. It's because everything is built in the same area, or at least close by. Screens, brackets, drives, chips, screws...the transportation costs are low because they're all done close by. If you have screws built in Russia, brackets built in Dubai, screens built in Kyoto, cases built in Idaho...the prices go up because of the supply lines.

    That's Tim Cook's point - everything isn't made in the same area...

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