A US-made Mac Pro is a token gesture
commentary The Mac Pro is a niche product that Apple can easily afford to make in the US. How about an iPhone or iPad?
Apple CEO Tim Cook made some waves in December when he said the company would pour $100 million into a manufacturing facility in the US to manufacture some Macs. It was unclear until yesterday just which Mac would get the "Made In USA" treatment.
"It will happen in 2013," he said in an interview with Bloomberg back in December. "We're really proud of it. We could have quickly maybe done just assembly, but it's broader because we wanted to do something more substantial."
I'm not sure if the Mac Pro would fall under the definition of substantial. As the announcement was largely seen as a move to counter the criticism it leaned too heavily on outsourced production (which is actually true of virtually all tech companies), the cynic in me can't help but to think that having the Mac Pro made in the US is largely a token gesture with little impact on the larger company.
"Given the limited production volumes of the Mac Pro, and the overall cost, the 'Made in the USA' label gives them a good marketing piece, while making good business sense," said Andrew Rassweiler for research firm IHS who covers supply chains.
Apple doesn't break out the sales of individual products within the Mac family, but the ultra high-end Mac Pro -- made more for video editors and other industry professionals -- has always been a niche product. Just look at the overall Mac sales, which in the last quarter fell to 3.8 million, down 200,000 from a year ago.
While not specifically disclosed, it's clear a vast majority of those sales were made up of its more popular MacBook line, whether it's the slimmer
Somewhere in there is a teeny, tiny slice that is the Mac Pro.
So it's not exactly jaw-dropping that Apple is assembling the $3,000 Mac Pro in the US, no matter how cool the promotional video looks.
A majority of the increase in cost would come from the higher pay Apple must dole out to US workers, according to Rassweiler. He noted that it would only contribute to a minor bump in the cost of the device, partly because the assembly work largely consists of putting together semi-finished assemblies into an enclosure, which doesn't require a lot of "human cycle time." A lot of the most labor-intensive parts would go through an automated line, he added.
What would be impressive is if Apple started putting its manufacturing facility to work building iPhones and iPads. But that is unlikely because the volume demand is so high. For orders that large, Apple would still need to go back to China and its specialized manufacturing partners.
Looking at the Mac Pro experiment, I can't help but to draw comparisons to Motorola Mobility's similarly ambitious plans to build phones in the US. Motorola earlier in the year hired 2,000 people in a 480,000 square-foot facility in Ft. Worth, Texas, to build customizable smartphones here.
The challenges of increasing production in a new facility was evident, with the company. Motorola continues to be a drag on Google, posting an operating loss of $248 million in the last quarter.
Still, it represents an earnest effort to actually shake things up with its core smartphone line.
The Mac Pro does not.
Apple, of course, could be gradually expanding the facility to handle more lines of Macs, and may even one day include iPhones and iPads into its production plans. This may just be a start of something bigger.
Until then, this is little more than a glorified and expensive publicity stunt.