Friday, December 7, 2012

Apple Inc. (NASDAQ:AAPL) to invest $100M next year in U.S. Mac production

Apple Inc.(NASDAQ:AAPL)’s CEO Tim Cook made a formal statement that the company would manufacture a new range of iMacs exclusively in the U.S market by the end of the next year. Analysts anticipate that the decision was triggered largely as public relations manoeuvre in the wake of the criticism of labour practices at its Chinese manufacturers and calls for the company to bring some jobs back to the U.S.
Though Cooks remains evasive to comment further on the matter, he said in his interview with NBC that, “Next year we will do one of our existing Mac lines in the United States”. He made a similar statement in the interview to the BusinessWeek personnel. However Cook did not elaborate on the details of what line, or how extensive manufacturing would be, or even if it would be more than just assembling components shipped in from China. Bringing to light that the company intends to invest more than $100 million (though a small amount for a company whose bank balance is $120 billion), Cook stressed on the company’s intentions to do something which is more substantial. "We'll be working with people, and we'll be investing our money."
However, Brian White of Topeka Capital Markets, who is a Chinese manufacturer slao invests confidence in the company’s decision and states that, "It can make some economic sense to do some assembly in the U.S.” White too was initially apprehensive on Cook’s statement and showed his concerns about the pricing of the Apple products given the fact that they would be made in America. "If you did all of your production here, it would be cost prohibitive for U.S. customers. It would really jack up the prices." White was earlier keen on manufacturing the vast bulk of its products in China, providing the Western consumer electronic companies huge advantages. Cook too shrugged away with the question on the pricing of the iPhone which would be exclusively for the U.S. gentry. 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.
Analysts anticipate that it is too smaller move to be of any effect both to the prices of the Apple products to its consumers or to the profit margins of the company.

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