Design Con 2015

What’s Behind Apple’s Reshoring?

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Barbara Jorgensen
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Apple onshoring
Barbara Jorgensen   12/7/2012 2:16:37 PM
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I'm glad to see not everyone is as cynical as I am regarding Apple :-) I do think Apple is a responsible company and is aware of its shareholders. And the data outlined in the last few comments bears that out cost-wise, China is losing its advantage, and that can only be good for the US and Europe. I don't wish ill on China, just more parity.

Cryptoman
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Labour cannot remain cheap forever
Cryptoman   12/7/2012 12:15:14 PM
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Earnings are increasing in China and people's expectations are also rising. This means the cost for anyone wishing to manufacture in China will have to increase also. Apple has probably seen this trend.

Manufacturing in China will probably be very cheap for a few more years but the chances are it is not going to be as attractive as it is today. As people's expectations increase, they become more picky in terms of jobs and their salaries and benefits. In order to keep the wheels turning, the employers will have to become more generous.

sharonstarr
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Many Good Reasons for Reshoring
sharonstarr   12/7/2012 12:00:05 PM
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Although I can't comment on Apple's motives, I know from research I conducted this year for IPC what drove that decision for other electronics companies that have moved operations back to North America in the past four years. None of them mentioned PR or consumer sentiment as a driver. The number-one reason was quality control, followed closely by the rising costs of manufacturing and transportation. Other reasons cited included intellectual property control, the need to be close to customers, management costs (travel, etc.) and the need to improve customer service.

The IPC study, "On-Shoring in the Electronics Industry", was published in August of this year. Contact me for more information: sharonstarr@ipc.org or go to www.ipc.org.

Michael Kirschner
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Re: Apple's motives ?
Michael Kirschner   12/7/2012 11:59:36 AM
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I agree with chipmonk; it's not entirely PR-related; that would be a very cynical move by Apple. Manufacturer that co-locate product development and manufacturing can leverage internal expertise to improve both simultaneously. The US and Europe lost the manufacturing knowledge and expertise by first outsourcing it, then offshoring it. It also had other negative (as well as positive, admittedly) effects. So it's good to see this, whatever the rationale.

Ariella
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Re: Apple's leadership
Ariella   12/7/2012 10:01:31 AM
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@Barbara I don't think they would automatically copy what Apple does just because Apple did it. But they may look at the impact it has for Apple to see if it proves a positive move that would pay off for them, too.

Barbara Jorgensen
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Apple's leadership
Barbara Jorgensen   12/7/2012 9:20:17 AM
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Apple is a trend leader whether it wants to be or not. The company was held up as the poster child for worker abuse in China, and now reshoring. I agree that it would be great to see more companies follow Apple's lead. It's funny, though: companies blindly went to China becuase that's where their competitors were--some w/o a good business reason. Could the same happen in the US? Will other companies follow simply becuase Apple did it?

Wale Bakare
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Re: US DoD contract / Military contract
Wale Bakare   12/7/2012 6:36:20 AM
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Would you like to stake your money in a company with a billion of fanbase market size or the one with a 1/4 of thousand market segment?

AzmatMalik
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Production Synthesizer
Is this real -- I doubt it
AzmatMalik   12/6/2012 10:54:39 PM
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This is a PR stunt. Mostly. Though it could also be an attempt to test US manufacturing waters.  This reminds me re: Detroit's attitude towards EV's ... they dont, but for PR purposes keep dabbling.

_hm
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Supply Network Guru
US DoD contract / Military contract
_hm   12/6/2012 7:55:23 PM
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It may be Apple getting US DoD contract and requirement must be made in USA. Also, other value added market like application of Apple product in medical instrumentation may be manufactured in USA.

It is very soothing news.

 

chipmonk
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Production Synthesizer
Apple's motives ?
chipmonk   12/6/2012 6:55:41 PM
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With its supply chain stretched all over the world, frequent model changes is getting tough for Apple. Samsung does not have that problem as from the get go they had taken the honest ( but initially hard on the bottomline ) decision of building most everything ( from silicon to systems ) in house. They are already reaping the benefits - by bringing out an enormous number of models at many price points and outstripping Apple in SmartPhones sales 2:1. Soon Samsung will have better hardware ( certainly display ) compared to Apple. The handwriting is on the wall.

But to get the same soup to nuts capability as Samsung, the $100 million mentioned here is just a drop in the bucket. To build up similar fast turn - around mfg. capability ( mostly robots and people to run them ) here in N. America with a target throughput of 500 million units a year, Apple would have to invest something north of $ 15 billion.

Otherwise, I am afraid there will soon be a replay of the Mac vs PC duel that the cheaper, cruder Wintel m/c s won 20:1.

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