Australia Markets closed

Apple to produce line of Macs in the US


Apple CEO Tim Cook says the company will move production of one of its existing lines of Mac computers to the United States next year.

Industry watchers say the announcement is both a cunning public-relations move and a harbinger of more manufacturing jobs moving back to the US as wages rise in China.

Cook made the comments in an interview for NBC aired on Thursday. In a separate interview with Bloomberg Businessweek, he said that the company will spend $US100 million ($A96.06 million) in 2013 to move production of the line to the US from China.

"This doesn't mean that Apple will do it ourselves, but we'll be working with people and we'll be investing our money," Cook said, suggesting the company intends helping its Taiwanese manufacturing partner Foxconn Technology Group to set up a factory in the US.

Cook didn't say which line of computers would be produced in the US or where in the country they would be made.

But he told Bloomberg the production would include more than just final assembly, suggesting that machining of cases and printing of circuit boards could take place in the US.

Regardless, the US manufacturing line is expected to represent just a tiny piece of Apple's overall production, with sales of iPhones and iPads now dwarfing those of its computers.

Apple is latching on to a trend that could see many jobs move back to the US, said Hal Sirkin, a partner with The Boston Consulting Group.

He noted that Lenovo Group, the Chinese company that's neck-and-neck with Hewlett-Packard for the title of world's largest PC maker, announced in October that it will start making PCs and tablets in the US.

Chinese wages are raising 15 to 20 per cent per year, Sirkin said.

US wages are rising much more slowly, and the country is a cheap place to hire compared to other developed countries like Germany, France and Japan.

"Across a lot of industries, companies are rethinking their strategy of where the manufacturing takes place," Sirkin said.

Carl Howe, an analyst with Yankee Group, likened Apple's move to Henry Ford's famous 1914 decision to double his workers' pay, helping to build a middle class that could afford to buy cars.

But Cook's goal is probably more limited: to buy goodwill from US consumers.

"Yeah, it may be only (public relations), but it's a lot of high-value PR," he said.

Cook told NBC that companies like Apple chose to produce their products in places like China, not because of the lower costs, but because the manufacturing skills required aren't present in the US.

The news comes a day after Apple posted its worst stock drop in four years, erasing $35 million in market capitalisation. Apple's stock rose $5.39, or 1 per cent, to $544.18 in Thursday afternoon trading.