IS Magazine Blog

Apple Mac Pro News

Dec 19 2013

Apple iPad

Apple iPad (Photo credits: Best Buy)

Apple will take orders this Thursday for the new Apple Mac Pro personal computer, which is being produced in Texas with domestically made components as part of CEO Tim Cook's $100-million "made in the USA" initiative.
Cook posted last Wednesday on Twitter that they started manufacturing the Apple Mac Pro in Austin. He added that it's also the most powerful Mac ever.

Apple said that the sleek, cylindrical machine, which runs with Intel's latest Xeon chip, will be available at a starting price of $2,999. While Lenovo and Google are conducting some final assembly in the US of parts made overseas, Cook declared in October that Apple is manufacturing, rather than just putting together, the new Mac Pro's metal parts in the US.

Cook said that the company's difference is that it's taking a bottoms-up approach. They don't just want to assemble the Apple Mac Pro in the US but to make the whole machine there. He also said that Apple's partners are now using production processes and industrial molds that were developed in the US.

Cook's promise to domesticate some of the Apple's production followed several years of criticism from labor advocates about the conditions at their contractors' plants in China, where most of their products are made. Though Apple, the world's biggest technology company, hasn't revealed plans to produce other products in the US, new investments imply that it may move in that direction, including a new plant in Mesa, Arizona.

Quick calculations
The newest Apple Mac Pro version, a top-quality computer used by filmmakers and graphic designers who need the fastest performance, will be on sale during the height of the holiday's shopping season with customizable configurations priced at $2,999 and $3,999.

The sleek and rounded black machine, which looks like a small jet engine or space-age trash can, is 9.9 inches tall and is only eighth the current Mac Pro's size, the company said. Intel's new Xeon processors will make it handle calculations at double the speed of the current model, Apple has said, and will also use 70% less electricity because of its tinier size. The computer has 256 GB flash-based storage that's expandable to 1 TB or 1,000 gigabytes.
So far, the company's initiative isn't primed to have a large impact. Of Apple's $170.9 billion annual revenue, more than 70% comes from the iPad tablet and iPhone, which are made in China. The new Apple Mac Pro will possibly contribute less than 1% of Apple's 2014 sales, said Gene Munster, an analyst from Piper Jaffray. He expects the company will offer 1.1 million Apple Mac Pros in 2014, compared with around 300 million iPads and iPhones.

Other big technology companies have also been conducting more work in the US, yet only few have started manufacturing components within the country.

Recently, Apple has faced increased scrutiny of its overseas labor. Accusations of use of underage laborers, forced overtimes and other violations have led the company to investigate the conditions at Chinese manufacturing partners Pegatron Corporation and Hon Hai Precision Industry Company. Apple has also joined the Fair Labor Association, and regularly publishes results of several factory audits within the Supplier Responsibility Report.

'A drop in the bucket'
In December 2012, Cook said to Bloomberg Businessweek that the company will spend $100 million to make a new Mac model version in the United States. In his testimony before the United State Senate last May, Cook said the Apple Mac Pro would be made in Texas using parts made in Florida and Illinois and equipment made in Michigan and Kentucky.

Last month, the company said that a new Arizona plant will hire 2,000 people to make a glass alternative from synthetic sapphires which are progressively used in smartphones as home button and camera lens covers.

Cook declined to mention how many jobs Apple might create within the United States.

Some Apple suppliers are now taking measures to increase their US operations. Last month, Hon Hai declared that it would spend $30 million to construct a factory in Harrisburg, Pennsylvania Hon Hai CEO Terry Gou said that the plant's focus would be developing new automation technologies rather than making job-intensive production lines.

Given the decreased labor costs and efficient supply chain Apple has established in Asia, the company may probably never bring high-volume device manufacturing such as that of the iPhone back to the US, said Mike Fawkes, who supervised Hewlett-Packard's supply-chain processes until 2008. A Boston Consulting Group says that while China's labor costs have been increasing in recent years, they are still 60% lower than the United States' labor cost.

Fawkes said that it's a good sign to see Hon Hai further develop its US presence.  He also said that a 30-million dollar factory is just a drop in the bucket for any manufacturing of consequence.