5 ms·

Some new iMacs marked as being 'Assembled in USA'

58 points by Quekster 14y ago

prezjordan 14y ago
I wonder if assembling these in the US would win over many critical consumers and actually turn Apple a profit. Has this ever been done with another company? What sort of industry is this possible?
- RaSoJo 14y ago
  Methinks it happens in automobiles too. And higher end/larger electronic items. It comes down to 1)logistical costs, i.e. the cost of shipping a final product v/s shipping parts of the product. 2) Safety/damage rates of the items thus transported 3) Speed of transportation in either formats With the see-sawing of freight rates, Mr. Cook might be tweaking on the cost benefit analysis.
  - rdl 14y ago
    You forget 4) duty. that is probably the single biggest one -- sometimes components have a lower tariff rate than assembled final goods, and sometimes it makes sense to import low-value products and do a magic high-value "assembly" step in the country or compact (EU, NAFTA) of sale, if taxes are lower than duty, or if you can make the "assembly" step involve "purchasing and installing software or a license", and thus an expense, but not a tariff-subject item. The ultimate examples being "pressing boxed software". Assemble the box, manuals, etc. in a certain country, add the value during that step in the form of components, with the license not being dutiable, but a boxed software item imported would be. Regulatory arbitrage at its finest. This is pretty much why Apple makes some iPads in Brazil now.
    - yen223 14y ago
      The article did point out that the requirements for declaring something to be "Assembled in USA" are a lot more stringent.
      - rdl 14y ago
        The US also has low duties; it's mainly about some other countries, usually in the developing world, which have higher duties and more broken enforcement regimes. Also the US has weird loopholes with some territories or other treaty countries, so you can do less work to make something "made in USA" in some places and some industries than in others (I think Saipan, American Samoa, Puerto Rico have special status)
- hayksaakian 14y ago
  I doubt that this is happening due to a direct profit motive. Way more likely that this is simply an effort to save face after all the foxconn drama.
  - baddox 14y ago
    Why would you want to "save face" if not for profit?
  - gurkendoktor 14y ago
    There certainly was drama, but nobody believes that other manufacturers are any better, so I wouldn't call it "save face": Apple can actually gain a marketable advantage over everybody else here.
- Evbn 14y ago
  Don't know what Apple is doing, but it is common for firms to manufacture goods overseas, then put a small finishing touch in the US to get a Made/Assembled in USA label for PR or tax purposes.
  - deleted 14y ago
    [deleted]
  - ams6110 14y ago
    The article states that "screwdriver" or other non-transformative assembly of foreign components does not qualify. There must be a substantive transformation of the parts to qualify as "assembly"
    - rdtsc 14y ago
      Well ok what is the minimum then? Does epoxy gluing qualify? Plugin in ram module and glue case together? At the same time I kind of doubt this is done much for PR purposes. Can't see really people dropping or picking Apple products in favor of alternatives because of the assembly origin.
      - droithomme 14y ago
        There's absolutely no doubt that all the components were made overseas, the boards made and populated overseas, and probably the aluminum casing as well though that is conceivably Made in USA. The glass might be made in USA, a lot of Corning was at least recently. It's final assembly, screwing the parts together. Gluing the screen. No screws in the screen, so perhaps Apple imagines that connecting cables and gluing the screen counts as assembly, and who is to say otherwise.
        nnnnni 14y ago
        Sure, that's assembly. The fabrication is done at Foxconn still...
    - chimeracoder 14y ago
- sliverstorm 14y ago
  They certainly have the profit margins to fit it. Now, if we're talking about further boosting their prices to maintain the same margins...
- martin_bech 14y ago
  I dont think most people would look at where the product is assembled, however as a European, assembled in the US, might be worse than made in china. US made items dont have the best reputation here, the stadard US 30 day warranty, dose not scream "made to last".. (European law requieres all products to feature a 2 year warranty)
  - yardie 14y ago
    It's not like the US has a monopoly on bad quality. Renault, Fiat, and Peugeot have all been forced out of the US because their cars were terrible compared to an equally equipped Japanese car. Mercedes-Benz and BMW coasted on their cachet while everyone was in agreement they broke just as often as any other car, but with parts that cost 3x ($$) as much and could only be repaired at specific shops ($$$). Mercedes-Benz was particularly notorious for going a bit gadget crazy in the early 2000s. Random things, like the windows not working because the ECU was out of memory, would break and require an overnight shipment from Stutgart. Also, there is no 30-day warranty in the US. It's a minimum of 1 year on parts and labor. 30 days is the legal amount of time you have to return a defective item to the store for a full refund (doesn't apply to EOL/clearance items which have been severely discounted to account for the loss of warranty). Also, as I learned the hard way recently, this 2-year EU warranty isn't in effect everywhere and the process to get compensation usually gets you lots of runaround.
    - martin_bech 14y ago
      Im sorry if I came off as if everything made in the US is terrible and everything made in Europe, is the best ever, that certainly wasn't my intention. It was merely a comment on the probability of increased profits, from the assembled in the US markings, you have to remember that about 60% of Apple profits (and still climbing) come from outside the US, and outside the US, the markings would not mean as much.
Samuel_Michon 14y ago
From the article: "Besides built-to-order machines, the 21.5-inch iMacs are some of the first known examples of an Apple computer being assembled in the U.S., according to Fortune." That's incorrect. For more than ten years, all Apple computers used to be assembled in the US of A [0]. http://www.strategosinc.com/articles/apple-foxconn-strategy-1.htm http://www.strategosinc.com/articles/apple-foxconn-strategy-... [0] Except perhaps for Apple Is sold outside of the US, as customers were expected to assemble that model themselves.
ck2 14y ago
Oh come on, this is pure lies. There is zero enforcement or oversight for this, they cannot even sue Monsanto, how could government stop this. What if it's assembled by machines in a US territory with a handful of people working at below minimum wage? They can still label it "assembled in the usa".
muhfuhkuh 14y ago
Wasn't it Steve Jobs himself who said to President Obama at a dinner that "those jobs aren't coming back" when talking about high-tech manufacturing? I've been reading about other technology companies besides Apple doing this as well. Element and Vizio, two value-tier (think Wal-Mart and Target) flat-screen TV manufacturers have major assembly plants here in the states. They cited a combo of labor, shipping and duty being cost-ineffective at their price levels to make and ship from China.
- Samuel_Michon 14y ago
  Those are actually not contradictory. Apparently, it's cost effective to assemble products in the US that incorporate large LCD screens. Apple was already assembling BTO iMacs in the US, and now some standard iMacs as well. iPhones, iPods, and iPads are a different story, as they're a lot smaller. An airplane can fit a lot more boxed 9.7" iPads than it can fit boxed 21.5" iMacs – 28 times, to be exact (I just did the math.) As for Steve Jobs' remarks, it seems he wasn't talking about iMacs but about iPads, iPhones and iPods: "As Steve Jobs of Apple spoke, Obama interrupted with an inquiry of his own: What would it take to make iPhones in the United States? Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas. Why can't that work come home? Obama asked. Jobs' reply was unambiguous. "Those jobs aren't coming back," he said, according to another dinner guest." http://www.heraldtribune.com/article/20120123/ARTICLE/301239999 http://www.heraldtribune.com/article/20120123/ARTICLE/301239...
  - arrrg 14y ago
    Even “those jobs aren’t coming back” is a somewhat polite and euphemistic answer. Those jobs were never even in the USA in the first place. The USA could never support making phones and tablets on the scale on which they are made in China.
- jseliger 14y ago
  > Wasn't it Steve Jobs himself who said to President Obama at a dinner that "those jobs aren't coming back" when talking about high-tech manufacturing? Interestingly enough, The Atlantic just ran two long articles about the return of American manufacturing: http://www.theatlantic.com/magazine/archive/2012/12/mr-china-comes-to-america/309160/ http://www.theatlantic.com/magazine/archive/2012/12/mr-china... and http://www.theatlantic.com/magazine/archive/2012/12/the-insourcing-boom/309166/ http://www.theatlantic.com/magazine/archive/2012/12/the-inso... . Both are worth reading in full. Clearly we're not going to get back to the 1950s, when manufacturing provided much of the U.S.'s employment base. But we're still substantial gains in the sector, and the belief that outsourcing always makes financial sense is disappearing.

58 points by Quekster 14y ago

I wonder if assembling these in the US would win over many critical consumers and actually turn Apple a profit. Has this ever been done with another company? What sort of industry is this possible?

RaSoJo 14y ago
Methinks it happens in automobiles too. And higher end/larger electronic items. It comes down to 1)logistical costs, i.e. the cost of shipping a final product v/s shipping parts of the product. 2) Safety/damage rates of the items thus transported 3) Speed of transportation in either formats With the see-sawing of freight rates, Mr. Cook might be tweaking on the cost benefit analysis.
- rdl 14y ago
  You forget 4) duty. that is probably the single biggest one -- sometimes components have a lower tariff rate than assembled final goods, and sometimes it makes sense to import low-value products and do a magic high-value "assembly" step in the country or compact (EU, NAFTA) of sale, if taxes are lower than duty, or if you can make the "assembly" step involve "purchasing and installing software or a license", and thus an expense, but not a tariff-subject item. The ultimate examples being "pressing boxed software". Assemble the box, manuals, etc. in a certain country, add the value during that step in the form of components, with the license not being dutiable, but a boxed software item imported would be. Regulatory arbitrage at its finest. This is pretty much why Apple makes some iPads in Brazil now.
  - yen223 14y ago
    The article did point out that the requirements for declaring something to be "Assembled in USA" are a lot more stringent.
    - rdl 14y ago
      The US also has low duties; it's mainly about some other countries, usually in the developing world, which have higher duties and more broken enforcement regimes. Also the US has weird loopholes with some territories or other treaty countries, so you can do less work to make something "made in USA" in some places and some industries than in others (I think Saipan, American Samoa, Puerto Rico have special status)
hayksaakian 14y ago
I doubt that this is happening due to a direct profit motive. Way more likely that this is simply an effort to save face after all the foxconn drama.
- baddox 14y ago
  Why would you want to "save face" if not for profit?
- gurkendoktor 14y ago
  There certainly was drama, but nobody believes that other manufacturers are any better, so I wouldn't call it "save face": Apple can actually gain a marketable advantage over everybody else here.
Evbn 14y ago
Don't know what Apple is doing, but it is common for firms to manufacture goods overseas, then put a small finishing touch in the US to get a Made/Assembled in USA label for PR or tax purposes.
- deleted 14y ago
  [deleted]
- ams6110 14y ago
  The article states that "screwdriver" or other non-transformative assembly of foreign components does not qualify. There must be a substantive transformation of the parts to qualify as "assembly"
  - rdtsc 14y ago
    Well ok what is the minimum then? Does epoxy gluing qualify? Plugin in ram module and glue case together? At the same time I kind of doubt this is done much for PR purposes. Can't see really people dropping or picking Apple products in favor of alternatives because of the assembly origin.
    - droithomme 14y ago
      There's absolutely no doubt that all the components were made overseas, the boards made and populated overseas, and probably the aluminum casing as well though that is conceivably Made in USA. The glass might be made in USA, a lot of Corning was at least recently. It's final assembly, screwing the parts together. Gluing the screen. No screws in the screen, so perhaps Apple imagines that connecting cables and gluing the screen counts as assembly, and who is to say otherwise.
      - nnnnni 14y ago
        Sure, that's assembly. The fabrication is done at Foxconn still...
  - chimeracoder 14y ago
sliverstorm 14y ago
They certainly have the profit margins to fit it. Now, if we're talking about further boosting their prices to maintain the same margins...
martin_bech 14y ago
I dont think most people would look at where the product is assembled, however as a European, assembled in the US, might be worse than made in china. US made items dont have the best reputation here, the stadard US 30 day warranty, dose not scream "made to last".. (European law requieres all products to feature a 2 year warranty)
- yardie 14y ago
  It's not like the US has a monopoly on bad quality. Renault, Fiat, and Peugeot have all been forced out of the US because their cars were terrible compared to an equally equipped Japanese car. Mercedes-Benz and BMW coasted on their cachet while everyone was in agreement they broke just as often as any other car, but with parts that cost 3x ($$) as much and could only be repaired at specific shops ($$$). Mercedes-Benz was particularly notorious for going a bit gadget crazy in the early 2000s. Random things, like the windows not working because the ECU was out of memory, would break and require an overnight shipment from Stutgart. Also, there is no 30-day warranty in the US. It's a minimum of 1 year on parts and labor. 30 days is the legal amount of time you have to return a defective item to the store for a full refund (doesn't apply to EOL/clearance items which have been severely discounted to account for the loss of warranty). Also, as I learned the hard way recently, this 2-year EU warranty isn't in effect everywhere and the process to get compensation usually gets you lots of runaround.
  - martin_bech 14y ago
    Im sorry if I came off as if everything made in the US is terrible and everything made in Europe, is the best ever, that certainly wasn't my intention. It was merely a comment on the probability of increased profits, from the assembled in the US markings, you have to remember that about 60% of Apple profits (and still climbing) come from outside the US, and outside the US, the markings would not mean as much.

Samuel_Michon 14y ago

From the article: "Besides built-to-order machines, the 21.5-inch iMacs are some of the first known examples of an Apple computer being assembled in the U.S., according to Fortune." That's incorrect. For more than ten years, all Apple computers used to be assembled in the US of A [0]. http://www.strategosinc.com/articles/apple-foxconn-strategy-1.htm http://www.strategosinc.com/articles/apple-foxconn-strategy-... [0] Except perhaps for Apple Is sold outside of the US, as customers were expected to assemble that model themselves.

ck2 14y ago

Oh come on, this is pure lies. There is zero enforcement or oversight for this, they cannot even sue Monsanto, how could government stop this. What if it's assembled by machines in a US territory with a handful of people working at below minimum wage? They can still label it "assembled in the usa".

muhfuhkuh 14y ago

Wasn't it Steve Jobs himself who said to President Obama at a dinner that "those jobs aren't coming back" when talking about high-tech manufacturing? I've been reading about other technology companies besides Apple doing this as well. Element and Vizio, two value-tier (think Wal-Mart and Target) flat-screen TV manufacturers have major assembly plants here in the states. They cited a combo of labor, shipping and duty being cost-ineffective at their price levels to make and ship from China.

Samuel_Michon 14y ago
Those are actually not contradictory. Apparently, it's cost effective to assemble products in the US that incorporate large LCD screens. Apple was already assembling BTO iMacs in the US, and now some standard iMacs as well. iPhones, iPods, and iPads are a different story, as they're a lot smaller. An airplane can fit a lot more boxed 9.7" iPads than it can fit boxed 21.5" iMacs – 28 times, to be exact (I just did the math.) As for Steve Jobs' remarks, it seems he wasn't talking about iMacs but about iPads, iPhones and iPods: "As Steve Jobs of Apple spoke, Obama interrupted with an inquiry of his own: What would it take to make iPhones in the United States? Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas. Why can't that work come home? Obama asked. Jobs' reply was unambiguous. "Those jobs aren't coming back," he said, according to another dinner guest." http://www.heraldtribune.com/article/20120123/ARTICLE/301239999 http://www.heraldtribune.com/article/20120123/ARTICLE/301239...
- arrrg 14y ago
  Even “those jobs aren’t coming back” is a somewhat polite and euphemistic answer. Those jobs were never even in the USA in the first place. The USA could never support making phones and tablets on the scale on which they are made in China.
jseliger 14y ago
> Wasn't it Steve Jobs himself who said to President Obama at a dinner that "those jobs aren't coming back" when talking about high-tech manufacturing? Interestingly enough, The Atlantic just ran two long articles about the return of American manufacturing: http://www.theatlantic.com/magazine/archive/2012/12/mr-china-comes-to-america/309160/ http://www.theatlantic.com/magazine/archive/2012/12/mr-china... and http://www.theatlantic.com/magazine/archive/2012/12/the-insourcing-boom/309166/ http://www.theatlantic.com/magazine/archive/2012/12/the-inso... . Both are worth reading in full. Clearly we're not going to get back to the 1950s, when manufacturing provided much of the U.S.'s employment base. But we're still substantial gains in the sector, and the belief that outsourcing always makes financial sense is disappearing.