twolverton@mercurynews.com
In a move that could ease criticism that Apple (AAPL) has offshored tens of thousands of manufacturing jobs to Asia, the Cupertino company will start producing one of its Mac computer lines somewhere in the United States starting next year, CEO Tim Cook said in a pair of rare interviews made public Thursday.
Apple won't manufacture the computers itself, but will contract with other companies and invest $100 million in the effort, Cook said.
"We've been working on this for a long time, and we were getting closer to it," he told Bloomberg Businessweek. "We could have quickly maybe done just assembly, but it's broader because we wanted to do something more substantial."
But the planned investment represents a tiny fraction of Apple's $100 billion in cash and investments, and last year alone it spent more than $8 billion on property, facilities and equipment. Meanwhile, Intel (INTC) and other electronics manufacturers often spend billions of dollars when they open new factories.
Michael Palma, a research manager who studies electronics manufacturing services for technology consulting firm IDC, said a $100
million investment is "going to sound really good," but is more of a "public relations initiative" than a meaningful shift in Apple's business model or a meaningful contribution to the U.S. economy."The reality is that it's probably not going lead to significant employment jumps, and it's not going to impact their business or their investments," Palma said.
Cook did not say which Mac computers would be made in the United States, where they would be made or which contractor Apple would use. A spokesman for Apple declined to provide any details, but Bloomberg reported Thursday that a spokesman for Foxconn, the Taiwan-based manufacturing company that makes many of Apple's products in China, plans to expand its operations in North America because of customer demand. The Foxconn spokesman did not specify which customers were seeking such moves.
Some of Apple's newest iMac desktop computers already carry a stamp saying they are assembled in the United States. Cook did not discuss how the current manufacturing efforts differ from Apple's plans.
Cook, long before becoming CEO, played a key role when Apple shut down its own factories and shifted to overseas contract manufacturers such as Foxconn. With lingering high
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)
unemployment in the United States and embarrassing disclosures about working conditions in Foxconn's factories, Apple, now the most valuable company in the world, faces mounting pressure to resume manufacturing its products in the United States.Cook said in a separate interview aired Thursday by NBC that Apple and other companies chose to make their products overseas not because of lower costs but because of a shortage of manufacturing skills in the United States.
He added that consumer electronics has never really had a big production presence in the United States and that the issue is more about starting production in the United States than bringing it back.
But Apple originally made its computers in California. It began outsourcing production in the mid-'90s, first by selling some plants to contract manufacturers, then by hiring manufacturers overseas. It assembled iMacs in Elk Grove until 2004.
Howard Wial, director of the Center for Urban Economic Development at the University of Illinois-Chicago, said Thursday that the skill level of production workers isn't a big barrier to bringing manufacturing jobs back to the United States.
"There are plenty of workers that still have manufacturing skills here," he said, adding that any declines in skill levels are due to ''the huge losses of manufacturing jobs that we suffered, particularly between 2000 and 2010."
By any measure, Cook's announcement represents a relatively small step toward resuming American manufacturing for the company. Its Mac line has become decreasingly important to Apple, which in its last fiscal year drew more than 70 percent of its revenue from sales of iPhones and iPads. Less than 15 percent of its revenues came from Mac sales.
The two interviews covered a wide range of topics. Cook reiterated Apple's "intense interest" in television, but declined to discuss any future products. And he dismissed the iPad's competitors as "confusing" products.
Cook also discussed the problems with Apple's new Maps application, which debuted with Apple's iPhone 5 and has been lambasted for mislabeling and misplacing many points of interest.
"We set out to give the customer something to provide a better experience. And the truth is, it didn't live up to our expectations. We screwed up," he said.
Although asked, Cook declined to say much in either interview about Apple's recent management shake-up, including the departure of Scott Forstall, who had previously overseen the iPhone's software. Forstall was reportedly fired because he refused to sign on to Cook's apology for the Maps app.
Cook said the recent management changes were intended to encourage better "collaboration" at Apple.
On a more personal level, Cook described himself as a "private person." And he said the death last year of his former boss, Apple cofounder Steve Jobs, was the "saddest time" in his life.
Cook said he didn't realize the dire state of Jobs' health until right before he died. "I always thought he would bounce back, because he always did," he said.
The Associated Press contributed to this report. Contact Troy Wolverton at 408-840-4285. Follow him at Twitter.com/troywolv.
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