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Apple to invest $100M next year in U.S. Mac production

Primarily a PR ploy, analysts agree, but may make some sense to build iMacs in America

December 6, 2012 12:50 PM ET

Computerworld - Apple will manufacture one of its Mac lines exclusively in the U.S. by the end of 2013, CEO Tim Cook told NBC and BusinessWeek in interviews made public today.

Analysts saw the move as primarily a public relations ploy, a reaction to criticism of labor practices at its Chinese manufacturers and calls for the company to bring some jobs back to the U.S.

"Even Apple has to pay attention to public perception," said Ezra Gottheil, an analyst with Technology Business Research.

Cook was cagey about Apple's plans for the U.S.

"Next year we will do one of our existing Mac lines in the United States," Cook told NBC's Brian Williams in a segment that will air tonight on the network. Cook did not specify what line, or how extensive manufacturing would be, or even if it would be more than just assembling components shipped in from China.

To BusinessWeek, Cook was only slightly more forthcoming.

"Next year we are going to bring some production to the U.S. on the Mac," Cook told the publication in an exclusive interview. "We could have quickly maybe done just assembly, but it's broader because we wanted to do something more substantial."

Cook said that Apple will invest more than $100 million in the project -- pocket change for a company that has over $120 billion in the bank -- but that it wouldn't do it themselves. "We'll be working with people, and we'll be investing our money," he said.

"It can make some economic sense to do some assembly in the U.S.," said Brian White of Topeka Capital Markets, who then dismissed Cook's announcement as a marketing move. "I just don't believe in this whole 'We have to make things in the America," he said. "You should do what you do best."

And to White, that means manufacturing the vast bulk of its products in China, which still retains an enormous advantage for Western consumer electronics companies.

"There's still a substantial difference [in costs]," White said. "If you did all of your production here, it would be cost prohibitive for U.S. customers. It would really jack up the prices."

NBC's Williams, in fact, asked Cook what it would mean to the price of an iPhone to make it exclusively in the U.S., but Cook dodged the question, instead ticking off some of the components that are made in America, including the iPhone's glass panel and what he called its "engine," a reference to the system-on-a-chip (SoC), or processor, which Apple designs.

Both Gottheil and White speculated that it could make sense on the spreadsheet to assemble larger Macs -- such as the iMac -- in the U.S., to save on shipping costs to American customers.

Gottheil was more likely to accept Apple's move on its face. "They're doing it out of good business practice," he said. "They don't do things out of the goodness of their heart."



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