What Will Apple Likely Build First in the US?

Apple CEO Tim Cook has announced that Apple will build one of its computer lines in the U.S. next year. Which one?

My guess is this will be MacPro for the following reasons:

1. Simple Assembly: MacPro is by far the easiest product to assemble, and requires no specialized skills. While it’s a sad reflection on our manufacturing skills in the U.S., as a practical matter most of Apple’s other products (such as iPhone 5 and to a lesser extent the iPad and iPad mini) are very difficult to assemble. Among laptops, Apple’s models are all evolving toward complex assembly designs that are more similar to iPads than computers; MacBook Pro Retina and MacBook Air are probably the most difficult to assemble, followed the MacBook Pros.  For desktops, the new iMac’s screen is quite challenging to assemble, and the whole design packs a lot into a thin package; the Mac Mini is easier but still crams a lot into a small space. In contrast, the MacPro is electronics assembly at its most basic, with no customer batteries to solder in and a large form factor which makes assembly much simpler.

2. Heaviest: MacPro is the heaviest product and comes in the bulkiest packaging -- both of which make it expensive to ship via air from China.

3. Custom Headstart: Apple is already assembling build-to-order MacPro’s in Texas (my current MacPro was shipped from Irving Texas). I suspect that a higher percentage of MacPro’s are customized compared to other models given the user base.

4. Lowest Unit Volumes: Smaller scale assembly translates to less of a cost penalty, and lower capital costs in manufacturing.

5. Made for USA: A higher percentage of demand is probably in the US compared to other computer models, making this a good model to build domestically.

6. Fatter Margins: The dollar margin is greatest, with price points starting at $2,500 but with most configurations costing considerably more -- a fully-loaded model runs $15,317 and the MacPro targets professionals who want the extra power, so they typically don’t choose the lowest-end quad core model. Higher margins on the MacPro also make it possible to absorb potentially higher labor cost.

Dipping its toes back into U.S. assembly is a positive development for Apple.  This should help mute some ongoing public criticism for outsourcing all manufacturing to China, and it should also begin to provide a small hedge again potential foreign exchange risk if China ever moves toward floating their currency. And I applaud Apple for starting in a measured way.  Bravo!