December 6, 2012

Apple: iMacs to be "Made in America"

In a surprising turn of events, Apple's CEO Tim Cook has stated that they will shift production of iMacs to the United States. These new iMacs are expected to appear as early as 2013, however, many of the parts in the iMac and the rest of Apple's devices will continue to be made in Chinese factories. This $100 million investment might just be to repair Apple's image in the eyes of the world. After many suicides, riots, and disruptions at Foxconn this year alone, Apple will surely be desperate to reestablish themselves as an ethical company.

Looking at the bright side, Apple may be beginning a trend where companies may begin shifting production off from sweatshop-like factories, towards others which are more worker-friendly. As a result, Apple will be creating more jobs in the USA, of which they already maintain 600,000 direct (employees), and more in indirect (suppliers, app developers) in the United States. Even though the amount of iMacs sold is small compared to other iDevices, the US economy will take any bit of good news that comes its way.

Many people have expressed their opinions about Apple bringing other products back to the USA as well, but those seem unlikely - which would show one of the few benefits of Foxconn (from a business standpoint). Foxconn's amazingly large and developed manufacturing capacity is not only due to its vast amount of factories, but it is because they force workers to work extensively long hours, without vacations or breaks. With high-demand items like the iPhone, technology companies like Apple have to take advantage of this manufacturing capacity, with its low costs. This is considered unacceptable in North America, and as a result, companies will need to hire much more workers, build more factories, and increase wages. All of this results in more expenses, destroying Apple's profit margins, ultimately affecting its stock.

A hidden proponent of this move might just be supply chains. As many of Apple's suppliers have factories based in the United States, this might just save Apple a few costs if they manage to move other operations back to the US, even if in small scales. Intel already has many fabrication plants based in the US, Samsung produces Apple's A6 CPUs at its Austin Fab plant, and Corning makes their famous Gorilla Glass as well. With Foxconn planning to build US plants as well (in California and Texas), it might just be possible for them to further move operations to America, while maintaining business ties with Foxconn. But will that be warranted from the public's point of view? Buying Foxconn is supporting a company that puts its workers through harsh conditions, having it made in the USA by this company might help the US economy, but ultimately profits go to a company considered as "unethical".

Source: NextPowerUp! , CNN Money