Apple Brings Some Manufacturing Back To USA

The big news today is Apple is making some Macs in the USA. This isn’t terribly shocking if you think about it.

iMacs really aren’t as complicated as they were just a few years ago, the parts have consolidated quite a bit. In addition most of the complexity of assembly is being given to increasingly advanced robotics. What years ago was a circuit board put together by humans is now a single chip stamped out by machine. I mentioned this back in June when Google started manufacturing in the US.

I wouldn’t expect something as labor intensive as the iPhone or iPad to be built in the US anytime soon. The limited media access to the factories that we’ve seen, it’s a very manual process.

Manufacturing large goods like an iMac in the US has advantages. First reduced freight costs, less time in Apple’s inventory (something Tim Cook is known to care extensively about), and quite likely tax breaks and subsidies.

I suspect the idea going forward is if it’s labor intensive, do it overseas. If you can do it with minimal human labor, bring it to the US. We’ll see more of these things come “back” to the US as manufacturing techniques are refined and improve extensively. But I don’t think we’ll see the huge number of factory jobs we once had.

On The iOS-ification Of Mac OS X

Tim Cook spoke at the Goldman Sachs Technology and Internet Conference. Everyone was paying attention to information about Apple’s cash, and labor issues. They overlooked this juicy nugget of information:

Still, Cook doesn’t think the iPad will lead to the death of the personal computer as we’ve known it for the past 25 years or so. “I don’t predict the demise of the PC industry, I don’t subscribe to that,” he said, although admitting that tablet sales were eating into Mac sales and were likely having the same effect on the PC industry, which is essentially stagnant. It seems pretty clear that Cook thinks of the iPad as a different product from the PC/Mac, unlike some industry observers who would prefer to lump the two together.

While everyone is insisting Mac OS X is just going to merge into iOS and talking about iOS-fication of Mac OS X, clearly Tim Cook at least for now sees it differently.

I don’t think Apple would benefit by cannibalizing the desktop/laptop market. It’s somewhat high margin and eventually the tablet margin will drop as competition ramps up. Tim Cook knows that. Apple’s PC market share was never huge, but it was enough to grow the company for many years, and has been quietly gaining strength, even in the corporate world.

PC’s are still much more flexible and capable than any mobile product. Keep in mind almost nobody can take a photo they took on an iPhone and put it on paper without a desktop. Printing had been figured out by the time the IBM 5150 shipped. It’s worth noting however that this is likely at least in part due to patent wars and not really a technical limitation.

Steve Jobs Steps Down As CEO

As released by Apple:

To the Apple Board of Directors and the Apple Community:

I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.

I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee.

As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.

I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role.

I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.

Steve

A few things strike me here:

First of all, the letter is addressed “Apple Board of Directors and the Apple Community” (emphasis mine), which as far as I know is unprecedented by Steve Jobs and really by Apple. Apple has never really acknowledged the community around it. In past “letters” (for example Thoughts on Flash), Steve Jobs just starts. It’s like an actor only acknowledges his audience when he comes out to take a bow to ensure they don’t remove the fourth wall.

Second, I sadly suspect this position of “Chairman of the Board, director and Apple employee” is largely symbolic. From what’s known about Steve Jobs is he almost lived for this job. Stepping down is a major concession for someone so obsessive about a vision and passionate about achieving it with perfection. That said, he seemed pretty strong a few weeks ago at the Cupertino City Council, so I don’t mean to suggest he’s on his deathbed. Just unlikely to regain enough health to keep a CEO schedule. Several changes in 10.7 Lion like the odd design for Calendar and Address Book make me think he didn’t have much say in it’s design either.

Third, this succession plan is hardly shocking. Tim Cook was groomed for this a quite some time. I suspect this was known by a select few for a little while now. Jonathan Ive was long suggested as his replacement, but that seemed unlikely given he already is in charge of industrial design, and the other half of the role (the business side) he has no experience in. He’s also notably reclusive and more subtle in presentations in contrast to Steve’s “reality distortion field” persona on stage. By elevating Cook and leaving Jonathan Ive to focus on design Apple gets the best of both worlds.

Lastly, I think Colin Barrett’s tweet put my personal perspective on this best:

I was 11 when Steve came back, and I’m 25 now. Can’t overstate the enormous impact Steve and Apple had on me growing up. Good luck, dude.

- @cbarrett

Indeed. Good luck Steve Jobs.