Can Apple make more stuff in the USA?
Is it possible for Apple to manufacture products in the U.S.? Or at least get more components from U.S.-based manufacturers?
One of the more topical discussions in Steve Jobs' biography addresses Apple's tendency to "employ" a disproportionately large number of workers in China. And that strategy has been fodder for debates on national news networks like CNN because of stubbornly high levels of unemployment in the U.S.
Let's start with some recent statements by luminaries as politically diverse as Jim Hoffa, International Brotherhood of Teamsters President, Donald Trump, and CNN's Piers Morgan.
Here's what Hoffa said in a segment entitled "Fixing the Jobs Crisis" with CNN's Candy Crowley on September 4. "Instead of investing here, everything they (Apple) do is in China...I think the president should challenge the patriotism of these American corporations."
Piers Morgan made a similar statement this week to Donald Trump, who has been an advocate of making things in the U.S.
"More people were working for Apple in China than in America," Morgan said when talking about Steve Jobs' reign at Apple. Trump also had plenty to say about manufacturing things overseas, such as: "You must stop our jobs from leaving this country. We must start manufacturing our goods."
And Apple's response? When Steve Jobs met with President Obama in Silicon Valley he took the president to task for not making the U.S. more friendly to manufacturing, according to Walter Isaacson's biography, "Steve Jobs."
"The meeting actually lasted forty-five minutes, and Jobs did not hold back. 'You're headed for a one-term presidency,' Jobs told Obama at the outset. To prevent that, he said, the administration needed to be a lot more business-friendly. He described how easy it was to build a factory in China, and said that it was almost impossible to do so these days in America, largely because of regulations and unnecessary costs." (page 544)
Tough words. But would Americans work assembling iPhones at a factory like Foxconn's? If so, would it be a profitable enterprise for Apple? Could Apple find all of the engineers necessary? And would there be a steady stream of stories about working conditions like those allegedly at Amazon's warehouse in Allentown, Pa? (Not to mention the stories coming out of China.)
Hypotheticals aside, for now Apple has elected to make stuff in China. That said, have there been opportunities for Apple to source more components from companies that do a lot of their manufacturing in the U.S.?
We know Apple gets chips for MacBooks and Macs from Intel, which has most of its multibillion-dollar chip factories in the U.S. But what about Apple's hottest-selling products, the iPhone and the iPad? As mentioned above, those devices are made in China by companies like Foxconn using components (chips) from Asia-based suppliers including Samsung and Toshiba.
Jobs actually advocated for putting Intel chips inside of the iPhone and iPad butby Tony Fadell, a senior vice president at Apple at the time, who argued for using chips based on a design from U.K.-based ARM, according to Isaacson's book. Fadell won that argument.
Was that the right decision? And what about sourcing more memory (including flash) from companies like Micron Technology that do a lot of manufacturing in the U.S.?
Or here's an interesting idea I heard recently from a chip analyst: Apple, according to this analyst, has been talking to Globalfoundries, which is now completing a massive chip manufacturing complex in upstate New York.
Globalfoundries is certified to make ARM chips on an advanced 28-nanometer manufacturing process. It's not unreasonable to think that Apple could turn to New York-based Globalfoundries to make future A6 or A7 processors for iPhones and iPads.
Whatever happens, there are surely opportunities for Apple to source more from companies that manufacture things in the U.S. without putting a crimp on its successful product strategy.
Update: Later in the book (page 546), Jobs also had this to say about moving manufacturing jobs to the U.S. "Jobs went on to urge that a way be found to train more American engineers. Apple had 700,000 factory workers employed in China, he said, and that was because it needed 30,000 engineers on-site to support those workers," according to Isaacson's book. "You can't find that many in America to hire," Jobs said.