Apple assembling iMacs in the United States?

[MrHorspwer]

9 to 5 Mac had a nice little write-up about what "Assembled in America" means to the FTC and when it can be used.

The FTC says that "Assembled in American" can only be used when a "substantial transformation" has occurred, not just the final assembly of foreign-sourced components.

Personally, I think this has to do with the friction welding process that the new iMac is using. This was also reportedly the cause of the delay in the release. Is it really much of a stretch to think that China couldn't meet the demand for such a new and advanced assembly method and some production shifted to the U.S. as a result? This would also satisfy the FTC's requirements, since the chassis construction along with assembly would constitute a "substantial transformation".

 

[Papa Bear]

It's a fine like, a subjective line, between a healthy profit and usury.

 

[DuckRyder]

Originally Posted By: JHZR2
...Except that if you match truly apples to apples, that same laptop still costs $2500+ from the other manufacturer... ...


Exactly

 

[JHZR2]

Originally Posted By: MrHorspwer

Personally, I think this has to do with the friction welding process that the new iMac is using.


Is this a specialty or uncommon or new industrial process? If so, could it be export sensitive or ITAR or something like that? Controlled and not possible to be done outside of the US?

Just thinking out loud...

 

[MrHorspwer]

Originally Posted By: JHZR2
Originally Posted By: MrHorspwer

Personally, I think this has to do with the friction welding process that the new iMac is using.


Is this a specialty or uncommon or new industrial process? If so, could it be export sensitive or ITAR or something like that? Controlled and not possible to be done outside of the US?

Just thinking out loud...


I don't think there's any export compliance issues. It just may be a new enough process, especially in something as pedestrian as consumer electronics, that the yields put forth by China (remember, they also had issues with iPhone 5 assembly) were too low to sustain Apple's launch volume, thus they went elsewhere to fill the launch demands.

Some articles have also included alleged photos of a new iMac purchased in France with "Assembled in Ireland" etched on it.

 

[rg200amp]

Originally Posted By: Nick R
Originally Posted By: dparm
Originally Posted By: itguy08
Originally Posted By: dparm
Their profit margins are huge.


Why is that a problem?


I never said it's a problem, it's merely why their computers cost so much. Apple knows that they can charge a premium, so they do. Can't say I blame them.



Please, if Dell or HP tried to charge what apple is charging fo rthe same hardware, people would scream and cry ripoff.


If Ford tried to charge $40k for a bog standard focus, nobody would buy it. But people buy the way overpriced apple computers. And that's not why they are that expensive, go to your local store and look at the box. I will bet you $50 that 99.9% of them say "made in china" on it.


Yea, because Dell and HP are using bottom dollar build quality. There products are made of pennies worth of molded plastic. Except for the computers they model after Apple products. i.e. ultra books.

Dell Ultrabook (Macbook Air clone) is priced at $1000.
Dell - XPS Ultrabook 13.3" Laptop - 4GB Memory - 128GB Solid State Drive - Silver
http://www.bestbuy.com/site/Dell+-+XPS+Ultrabook+13.3%26%2334%3B+Laptop+-+4GB+Memory+-+128GB+Solid+State+Drive+-+Silver/6973883.p?id=1218817709749&skuId=6973883


You ford reference is totally off the handle.

A Macbook is not the equivalent to a "focus".

I mean, if your willing to ignore the design and build quality of Apple products, you will never understand the draw to them.

 

[rg200amp]

Originally Posted By: Nick R
Until I see more evidence or see what is going on, I'm not willing to give apple credit. What part of "assembly" was done in the US? Installation of a RAM DIMM? Installation of OS? Stamping an "apple" logo on it? Not willing to give them the benefit of the doubt.


Your never willing to give Apple credit. What else is new?

 

[PandaBear]

It would be good if they clarify what is their definition of assembling. Is plugging in ram stick and SSD / hard drive considered assembling?

This may save them money if the inventory isn't paid / charged until the stick goes into the machine. If they are paid for on the boat from China, it could cost them a lot if ram and flash memory price went down, and they have to keep the right inventory or customer will not pay more for the wrong config, or you have to discount it when the right config is out of stock.

Chinese labor isn't that cheap anymore, and the turn around time could be more expensive and risky than its benefit.

 

[JHZR2]

Originally Posted By: rg200amp
Yea, because Dell and HP are using bottom dollar build quality. There products are made of pennies worth of molded plastic. Except for the computers they model after Apple products. i.e. ultra books.
You ford reference is totally off the handle.




Agree. First hand reference is my new HP laptop with rubber seal gasket that I mentioned yesterday. Build quality is NOT the same.

 

[OVERKILL]

Originally Posted By: JHZR2
Originally Posted By: rg200amp
Yea, because Dell and HP are using bottom dollar build quality. There products are made of pennies worth of molded plastic. Except for the computers they model after Apple products. i.e. ultra books.
You ford reference is totally off the handle.




Agree. First hand reference is my new HP laptop with rubber seal gasket that I mentioned yesterday. Build quality is NOT the same.


I have an aluminum Ideapad U400 beside me (shameless MBP clone) and it also has the rubber seal, but it seals perfectly.

 

[JHZR2]

But at $949 MSRP and half the battery life, is it really equivalent? If you put 2x the battery in there (which would add $50-100) and were able to sell at MSRP, it would be roughly the same cost and spec. When I was in the apple store, I saw the base MBP 13" with similar specs for right around $1000 on sale.

And though the screen is 1" bigger, the pixel count is identical, I believe.

SO normalized, I cant say that the lenovo is really cheaper.

Ill bet my HP was cheaper in terms of build. Especially because it is an i7 computer with 13" screen (but I think higher res), vs an i5. I really like its size and some of the finishing on it, but it has surprised me that the curvature of the screen is such that the rubber gasket is worthless.

 

[crw]

I wonder why people are so obsessed with final assembly. Do you really want that business?

Final assembly of the iPhone, for example, is worth about 1% to 1.5% of the total cost. Using numbers from a few years ago, Apple spent about $7 for assembly, on a device that costs about $650. If you want the business, be prepared to do it better, or for less, (but in actuality, you need to be able to ramp up and produce millions of these devices quickly for the big release event...) No company in the US can do it. More importantly, no company would want to. If Foxconn can do it, for $7 a device, more power to 'em. I'd rather be designing the chips, anyway. ;-)

 

[itguy08]

Originally Posted By: crw
I wonder why people are so obsessed with final assembly. Do you really want that business?

Final assembly of the iPhone, for example, is worth about 1% to 1.5% of the total cost. Using numbers from a few years ago, Apple spent about $7 for assembly, on a device that costs about $650. If you want the business, be prepared to do it better, or for less, (but in actuality, you need to be able to ramp up and produce millions of these devices quickly for the big release event...) No company in the US can do it. More importantly, no company would want to. If Foxconn can do it, for $7 a device, more power to 'em. I'd rather be designing the chips, anyway. ;-)


I think the production capability is what has it in China. I read Steve Jobs' biography and he touches on it. We don't have the infrastructure (and too much red tape) and people to do it here. The cost difference is not that much at all when you factor in shipping, customs, etc.

China can "spin up people and factories" at an alarming rate. They have people trained to run these factories at moment's notice.

Look at all the red tape and such that has to happen to break ground on a new factory here in the USA. Then you have to have a trained workforce that can do what is needed. One only has to look at this thread here http://www.bobistheoilguy.com/forums/ubbthreads.php?ubb=showflat&Number=2824846 to realize our schools are not turning out well educated people.

I'd love to see us return to making stuff here. I'd gladly pay a little more for my next Mac if it were made here. If they assemble it here next would be the chip foundries, the LCD plants, etc. It makes sense to not ship this stuff 1/2-3/4 way around the world. Especially with fuel costs rising.

 

[cchase]

I'd rather have a plastic computer than an aluminum one. Aluminum (especially that used on the Macbooks) dents with far more ease than plastic cracks. A metal frame on the inside is important, not so sure on the outside. A good friend of mine rendered his DVD drive useless after dropping (what I thought to be) a light, paperback book on the edge of the case, denting the slot for the drive in his MBP. I am quite confident (given that I accidentally dropped a brick on someones computer once) that the plastic would not have broken with that kind of impact.

But color me one who has not been overly impressed with Apples "build quality". I agree that they are very precisely assembled and have a feel of quality about them, but I have not observed any higher degree of durability than any other comparably priced unit. This is just my experience, your mileage may vary.

 

[Hokiefyd]

Originally Posted By: crw
I wonder why people are so obsessed with final assembly. Do you really want that business?


It was never touted to be glamorous work. And it was never claimed to represent the majority cost of a product.

But it's a start. Even if components are still made overseas, you at least have American workers assembling the product here. Those are jobs that may not have existed otherwise. Apple's actions apparently have a large influence on many people; if they begin a "made in America" effort, there may be a lot of others who will follow, competitors and suppliers alike.

It's funny...a Foxconn factory in China has dangerous working conditions, and you hear, "THIS is why I'll never buy an Apple product." Apple begins to at least move some of its assembly to the United States, and you hear, "who cares about final assembly?" Not necessarily from the same people, I know, but still curious to gauge the reaction.

 

[PandaBear]

The final assembly of a computer (slapping rams sticks, CPU, battery, hard drive into the case and close it) is really nothing vs the rest of the work.

I would not believe in Steve Jobs saying that assembling in China is not about cost but about infrastructure. It has EVERYTHING to do with labor cost. They are gradually starting to move to Vietnam because China is now getting expensive as well. How do you explain that when they are moving to a country that is famous of power outage just a few years ago? When they say infrastructure, it is from US, Taiwan and Singapore because that's where the technical expertise to setup these factories are from and they went into China to setup the lines and ask low cost labor to run it.

The "infrastructure" Steve said is about how quickly the local officials will evict farmers and residents for land parcels to build factory, without good compensation but with thugs intimidation, cutting power and water supply, jail time, etc.

Regarding to percentage of manufacturing. Most of the difficult parts of a computer / electronics are still R&D in the US down to the manufacturing line setup. The screens and chips are made in Taiwan (TSMC), Japan (Toshiba), Korea (Samsung), and US (CPU). They made them in developed area because 1) a lot of these technologies have export ban, and 2) they are very automated and high precision / difficult. Most of the "Made in China" chips are merely wafer dicing and plastic enclosure packaging, then soldering onto PCB (automated and only require feeders), chassis assembly and cable install (the actual labor intensive part), and finally pushing buttons to run automated tests.

Installing ram sticks, CPU, hard drive on an already tested, cable routed computer doesn't take a lot of effort, and will not be an indicator that those cable routing, chassis assembly jobs will be coming back.

 

[Nick R]

Now, normally I wouldn't link to a fox news article, however in this case I'll make an exception.

http://www.foxnews.com/tech/2012/12/06/apple-next-macs-will-be-made-in-usa/

So, from the horses mouth they will be making at least some imacs in california. Ok, now this I can get behind. Maybe it shows that apple is finally, at last, listening to what other people are saying. Maybe the rest of the tech industry will take a hint. Heck, I have an old Tyan S1854 Trinity 400 Motherboard sitting around that says "Made in USA" on it. It would be nice to see a company like ASUS, Intel, build an assembly plant in the US. It's a small step, anyway.

 

[Hokiefyd]

Originally Posted By: Nick R
Maybe the rest of the tech industry will take a hint.


This is what I think may be neat to see, if it does pan out. The "rest of the industry" seems to get a pass on this, but Apple gets the press for Chinese manufacturing. I'm not sure I own a piece of electronics that was made in the United States. The HP business class keyboard on which I type says "Product of China" on it, and the Hyundai monitor at which I look says "Made in Korea". This HP 6005 SFF box doesn't seem to have a country or origin label on it.

If Apple begins to make at least *some* of their products in the United States, that's good. I think they need to follow that up with some good-but-not-overbearing marketing to let folks know about that, and get folks excited about that. Get folks talking about how electronics CAN be made here, and can MAYBE be made here and still cost the same (though Tim Cook apparently avoided answering the cost question).

I think this is big news. Not because it's any one individual company. But because it has the potential to create a lot of change industry-wide.

 

[PandaBear]

Originally Posted By: Hokiefyd
Get folks talking about how electronics CAN be made here, and can MAYBE be made here and still cost the same (though Tim Cook apparently avoided answering the cost question).


First you need to define what is "make".

Take your Intel CPU for example. The silicon ingot may be grown in a high temperature pit, then sliced and polished into a silicon wafer in a Japanese trade zone (taxed as Japanese territory but hiring US labor) in Phoenix, Arizona. Then it is doped and etched with circuits in an Intel FAB also in Arizona. Afterward it is sent to Philippine and Malaysia to be cut into dies and put onto epoxy packaging, and sent to China to be put into laptops or cell phones.

Same for a lot of the other electronics component like DRAM and flash memory (substitute US with Korea or Japan), hard drive (substitute US with Thailand, substitute Malaysia and Philippine with China), and chipsets (substitute US with Taiwan and Singapore).

So the breakdown of the added value and cost to the whole foodchain, is about 50% on the silicon before putting a package on it (and 50% of this part, 25% of total cost, is probably the manufacturing and development of the machines that make these chips, as a FAB can now cost 100 million each to build and upgrade once every 3-5 years, each machine can cost 1M to 20M, and they are made in US, Japan, Europe and not China, Taiwan, or Korea), 25% on the packaging of the chip, and 25% putting them in circuit boards and plastic/metal cases. Yet this last 25% get to claim the made in nation of the product and all the blunt of "job outsourcing" propaganda, rally point, evilness, and "companies doing the right thing".

Now if you make that a "slap a CPU and 2 ram sticks" and call it the final step and made in USA, and get all excited and motivated about it, good for you.

 

[Hokiefyd]

Nobody is saying that Apple is solving world hunger here.

I see this as simply starting the conversation about what can be done differently.