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Friday 22 August 2014

Apple to move production of one Mac line to US from China

Published 06/12/2012 | 15:41

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the new iPad Mini

APPLE will produce one of its existing lines of Mac computers in the United States next year, CEO Tim Cook said.

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Mr Cook made the comments in part of an interview taped for NBC's Rock Centre but aired on Thursday morning on Today and posted on the network's website.

In a separate interview with Bloomberg Businessweek, he said that the company will spend $100m in 2013 to move production of the line to the US from China.

"This doesn't mean that Apple will do it ourselves, but we'll be working with people and we'll be investing our money," Mr Cook told Bloomberg.

Like most consumer electronics companies, Apple lets contract manufacturers assemble its products overseas. However, the assembly accounts for little of the cost of making a PC or smartphone. Most of the cost lies in buying chips, and many of those are made in the US, Mr Cook noted in his interview with NBC.

The company and its manufacturing partner Foxconn Technology Group have faced significant criticism this year over working conditions at the Chinese facilities where Apple products are assembled, prompting Foxconn to raise salaries.

Mr Cook did not say which line of computers would be produced in the US or where in the country they would be made. But he told Bloomberg that the production would include more than just final assembly.

Regardless, the US manufacturing line is expected to represent just a tiny piece of Apple overall production, with sales of iPhones and iPads now dwarfing those of its computers.

Mr Cook said in his interview with NBC that companies like Apple chose to produce their products in places such as China, not because of the lower costs associated with it, but because the manufacturing skills required are just not present in the US anymore. He added that the consumer electronics world has never really had a big production presence in the US. As a result, it is really more about starting production in the US than bringing it back, he said.

The news comes a day after Apple posted its worst stock drop in four years, erasing $35m in market capitalisation. Apple shares fell $18.57, or 3.4pc, to $529.95 in Thursday's pre-market session.

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