More Apple coverage

There is no reason not to cheer the news that Apple (AAPL) is moving the manufacturing of some Macs from China back to the United States.

What's not to like? The world's coolest, richest, most-talked-about company giving a shot in the arm to the Made in America movement; CEO Tim Cook saying that Apple has a responsibility to create jobs; and the prospect of firing up a computer that was shipped from down the street instead of across the ocean.

Apple’s Chief Executive Tim Cook, left, is shown with NBC’s Brian Williams during an exclusive interview.
Apple's Chief Executive Tim Cook, left, is shown with NBC's Brian Williams during an exclusive interview airing on "Rock Center with Brian Williams" in New York on Dec. 6, 2012. Apple Inc. is planning to bring back some of its production of Mac computers to the United States from China next year. (NBC News)

But let's take a deep breath. First, nobody should be terribly surprised at the news. Manufacturing is undergoing a renaissance in the United States as wages in China rise and factory automation here marches on, as I've reported in an ongoing series called Made in the Bay Area. The Boston Consulting Group, in fact, recently predicted that by 2020 as many as 600,000 manufacturing jobs would return to the United States from China.

Second, Apple has been talking about doing more manufacturing in the United States for years. And one thing we can all agree on: When Apple says it wants to do something; it usually gets done.


Advertisement

As much as any of that, though, bringing the Mac back lines up nicely with Apple's relentless public campaign to deflect criticism that it creates hundreds of thousands of jobs in China that could be created in the United States. The company's line: Apple has directly and indirectly created 600,000 U.S. jobs.

"The cynical rationale, No.1, is publicity stunt," says Andy Tsay, a Santa Clara University business professor who has studied Apple's supply chain.

In fact, my knee-jerk reaction was pretty much the same as Tsay's knee-jerk reaction. His analysis, by the way, went deeper after he gave Apple's move some thought: The company is moving back only a small part of its manufacturing, which might already be highly automated, which means the difference in labor cost is negligible.

"I think that right now it's too early to say," Tsay adds. "From the point of view of the American economy, it's always good if somebody is talking about doing something like this, but the devil is in the details."

Ah, details. That's something Apple produces precious little of, both domestically and internationally.

Thursday's announcement was like all Apple announcements: Highly choreographed, big on buzz, light on details and devoid of any follow-up answers.

In those interviews (with NBC and Bloomberg), Cook said Apple will spend $100 million next year to bring production of a Mac model to the United States. He didn't say which model, how many Macs would be built, to what extent the components would be produced domestically, where in the U.S. the machines would be made, how many people would be employed or even why Apple was making the move. Apple on Thursday declined to provide further details for my column.

Which leaves everyone speculating about why Apple does what it does. And in the end, isn't that what makes Apple announcements so much fun?

So let's get to it: For starters, the $100 million, which Apple will spend outfitting a factory run by Foxconn or some other contract manufacturer, is mad money for a company that has $121 billion in cash in the bank.

"Context is important," says Toni Sacconaghi, an analyst with Sanford C. Bernstein. "Apple says it's going to spend $10 billion in capital expenditures this year; $100 million is 1 percent."

The Mac is hardly Apple's star performer. Consider 2012 sales: 125 million iPhones; 58.3 million iPads; 18 million Macs. The number of Macs churned out in the United States will be relatively tiny, given the cash outlay and given that only a sliver of a sliver of Apple's envy-inducing products will be made here. So, don't expect the move to create a lot of jobs.

For a rough idea, Tsay says, we can look to Lenovo, the Chinese computer maker that announced in October that it was offshoring manufacturing jobs to North Carolina. Its laptop and desktop factory near Greensboro will create 115 jobs, the company said.

And remember, says longtime Apple watcher Tim Bajarin, of Creative Strategies, there is no way Apple is going to sacrifice profit just so it can make Macs in the United States. Chances are the company has figured out a way, perhaps a wildly innovative way, to do the same work with fewer people.

"Knowing Apple," Bajarin says, "it would not surprise me if they have had a breakthrough in some kind of manufacturing equipment that lets them do this. This is probably a good first step to see if what they're doing could work."

Oh, and forget about a Mac version being manufactured from start to finish in the United States. We just don't make the stuff you need to make a Mac anymore.

"The screen is still going to be manufactured overseas," Bajarin says. "The motherboard is still going to be manufactured overseas."

Which, OK, maybe takes a little bit of the zip out of the Apple-comes-to-America story. But why dwell on the negative? A journey of 1,000 miles -- or from Shenzhen to the U.S., for that matter -- starts with the first step.

Contact Mike Cassidy at mcassidy@mercurynews.com or 408-920-5536. Follow him at Twitter.com/mikecassidy.