Why The 2013 Mac Pro Will Be Made Exclusively In The USA



Earlier today, Apple CEO Tim Cook announced that, starting in 2013, Apple would start investing over $100 million in local business to build Macs in the United States.

Even more intriguing, he said one model of Mac would be made exclusively in the U.S. But which one?

Tim Cook wouldn’t say, but when you think about it, there’s one obvious contender: the Mac Pro. Here’s why.

Let’s start off by asking ourselves why Apple builds its products overseas to begin with.

There are two main reasons why Apple makes its products overseas. One is cost. The second is labor. Let’s look at these one by one.

It’s often said that the biggest reason why Apple makes its products in China and elsewhere is because of labor costs, and that’s certainly a factor: the average assembly line worker in China costs a lot less to employ than it would cost in America. It’s estimated that an iPhone made in America would cost Apple about $65 more to make in the United States than it would in China, not just for the cost of labor, but for the cost of shipping supply chain components over here for assembly.

That might not seem like a significant number, but it’s actually pretty big: the iPhone 5, for example, costs $207 for Apple to make, so we’re talking a 31.4% increase in build costs to Apple… a cost increase Apple would pass on to consumers.

Apple products are already criticized by many as being overpriced, and certainly a 30% increase in build costs would negatively effect most Mac sales. But the Mac Pro is different: it’s already a professional-only product. The retail price of the Mac Pro doesn’t matter as much to businesses, so Apple could bump the price and preserve their margins without seeing sales plummet. Apple can afford to make the Mac Pro domestic, and professionals can afford to buy a domestic Mac Pro.

But what about labor?

In the past, this has been a big problem for Apple when they have thought about making products in the United States. Apple has said in the past that “the U.S. has stopped producing people with the skills we need” to manufacture at the scale Cupertino needs. And in the past, Steve Jobs himself has complained to Obama about how hard it is to keep find trained engineers in the United States: talented students come to America to study engineering, but are then forced to leave the country because of prohibitive immigration laws.

What it all boils down to is that China has the kind of workers Apple needs. Not just skilled engineers, but workers who have spent the last decade gaining expertise necessary to build Apple’s increasingly complicated, thinner and harder-to-make products. Not to mention the sort of factories and facilities necessary to get super-slim iMacs, MacBooks, iPhones and iPads out the door.

But compared to those products, the Mac Pro is a much easier-to-build machine. It’s not unibody: the Mac Pro’s user-expandability is a major part of the computer’s appeal. It’s a Mac tower, and inside, it’s not all solid-state, but a bunch of separate components slotted into a fairly standard motherboard. This is the kind of Mac that you don’t need sophisticated labor to build: it’s plug and play! And while no one has ever made a computer as complicated as an iMac in the United States, tower PCs more or less similar to the Mac Pro are made here every day.

Tim Cook made clear in his interviews that Apple’s $100 million domestic investment was just a first step, and that if it works out, there will be more Apple products made in the United States to come.

The Mac Pro is a fantastic choice for such a first step: it’s a niche product with a high sticker price and a clientele that can afford to pay more for a “Made in the USA” sticker, while at the same time requiring the least manufacturing or labor sophistication of any of Apple’s Mac line-up to actually produce.

And what do you know? Apple’s already promised a new Mac Pro coming in 2013.

  • matrix3D

    I see one problem with this narrative… how in the world are the people that work at Foxconn considered “skilled engineers?” I’ve read countless articles about how people came from all over rural China to try and land a job at Foxconn. Now, I could be wrong, but something tells me that if you grew up in the Chinese countryside, you probably didn’t get a college degree in engineering.

  • FriarNurgle

    Mac Pro is such a niche market product line for Apple. The sales volumes are low enough to warrant making this move. It will likely give them wonderful PR and surely a tax kickback for job creation. I’d be surprised to see any increase in manufacturing cost passed on to the consumers given how long people have been waiting for a proper Mac Pro refresh. Apple can eat a little low profit margin on this one… until the robot labor force arrives in the coming years.

  • SignorRossi

    matrix3D, it’s not so much about the workers doing the actual assembly, but much more about their supervisors and the people, who make sure that all the machines work as they should. As those people tend to work on several projects before they manage a high-volume customer like Apple they also gain outstanding know-how in a company like foxconn.

  • bdkennedy

    Apple could bring down the cost of manufacturing in the U.S. by using robots on the production line. The iPhone and iMac will probably be the last machines assembled by humans because the components are just too small.

  • Ed_Kel

    I see one problem with this narrative… how in the world are the people that work at Foxconn considered “skilled engineers?” I’ve read countless articles about how people came from all over rural China to try and land a job at Foxconn. Now, I could be wrong, but something tells me that if you grew up in the Chinese countryside, you probably didn’t get a college degree in engineering.

    The term “Engineer” has turned into a common name used lightly. No longer do we think of engineers as highly skilled mechanical wizards. Anyone in the mechanical field that assembles or designs is considered an Engineer. I’ve seen it first hand as in my previous job I developed prototype battery packs. My title was “Prototype Designer” whereas the technicians assembling the packs under my supervision where “Prototype Engineers”. Only in Civil Engineering do you see the term “Engineer” actually mean something, since you need to be a certified Professional Engineer (PE) in the state[s] you plan to work in.

  • MacAdvisor

    If I may suggest, the real reason the Pro is cheaper for Apple to make here is it is a very large item with a lot of air inside. It needs a big box and, as a consequence, is not so easily shipped by air across the Pacific. Compare the box of an iPhone 5 to the needed for the Pro. The Pro takes up the volume of 100 iPhones.

    As many of the Pros are purchased in very customized configurations, I suspect the assembly line makes the products to order and then they can be shipped within the US by regular (and vastly cheaper) ground transportation. Thus, Apple saves money making it here where the short run line and ground transportation provides for a lower cost.

  • chipmason

    The biggest reason Chinese labor is used is flexibility. Manufacturing, especially in the US, depends on automation to make things quickly, dependably, and accurately. The downside to automation is flexibility: if you change your device, or components, you need to shut the line down, redo tooling, and processes. Think about how Apple is able to (secretly) switch to new iPhone5, make millions, and make millions for hundreds of carriers, available at the same time. And then they can make changes, improving quality, or the glue or whatever. This is the beauty of labor: it’s flexible, and in China, there is lots and lots of it. The work is hard, boring,and repetitive. Employees get bored and leave. But in China, there are thousands lined up at the factory, waiting to get a job.

    In the US, it would be somewhat easy to get and train your first set of workers, but after say 20% leave, it would start to get harder: we don’t have the population density of China, nor do we have the same mobility to the big cities as we once did. This is ok if you are building low volume, artisan quality items, like say build to order Mac Pros. But it just can’t work for high volume items like iPhones that would need automaton, paid off over years of runs.

    Chinese labor gives companies the volume they get from automation, with flexibility that is difficult or unaffordable with automation, the downside is quality control, likely evidenced by the shipping delays, scratches, etc we see from time to time.

  • Aaron

    Let’s just hope that the unions don’t hear about these plans. Then the costs will REALLY rise!

  • rvail317

    Foxconn already assembles HP’s business machines and workstations in Plainfield, Indiana. They could easily subcontract with Apple for assembling the MacPro, without Apple incurring any huge expense. Tim Cook formerly worked for Compaq, which HP bought out back during Carly Fiorina’s HP leadership.
    Shifting manufacturing to U.S. soil would save Apple some on import fees, especially with higher priced items like the MacPro.