RUMOR: Apple to significantly step up iPad production in China

Apple Online StoreApple is “stepping on the iPad gas,” Philip Elmer-DeWitt reports for Fortune.

DigiTimes “reported Tuesday that Apple (AAPL) has stepped up production of the iPad in China,” P.E.D. reports. “According to unnamed ‘sources from upstream component makers’ Foxconn has started mass-producing iPads at a new plant in Chengdu, China.”

P.E.D. reports, “Currently the new plant can only turn out a maximum 10,000 units per day, according to DigiTimes, but its sources say Foxconn has plans to set up about 50 iPad production lines in Chengdu with an annual maximum capacity of 40 million units.”

Full article here.

[Thanks to MacDailyNews Readers “iWill” and “JES42” for the heads up.]

19 Comments

  1. Heaven forbid they build some of the damn things in America.

    Could anything be more emblematic of why this country’s going to hell? We have an American company, struggling to fill demand for a product that’s largely sold to Americans, and the solution is to build out more production lines in CHINA! I doubt there was a hint of internal deliberations that maybe they could expand production to the US.

    I’m ashamed to be an iPad owner when I think of what it represents.

  2. @R2

    It is hard to imagine all of the jobs ipads could create. But the problem is the cost. If apple produced the product here, the cost would go up and allow a competitor to come in at a much lower cost. It is a catch 22. Until China operates on an equal playing field how can a company risk losing it’s business when there are much much better ways to keep the cost down. It totally sucks, the change has to happen with our government to make China’s currency a free market currency instead of it being tied to the dollar.

    But imagine if you were in a competitive field and were the CEO of the company. How on earth could you stay competitive making something here in the states. You would be out of business in less than it would take a slow boat to China.

  3. If it was done here the factories would all have been robotic staffed by maybe 100 people. Apple employs 3 times that much interfacing with suppliers and providing inspectors. Not to mention the logistics and sales stores here. Low paid assembly jobs are off shore because they are not cost effective to provide to the economy . Productivity is deficient without automation and repetitive stress injuries abound in the work place.

  4. Ya, because sales staff, inspectors and the like add so much to a countries GDP.

    Let’s face it – Globalization means that either their standard of living has to go up or ours has to go down. (Or some of both.) It’s really not that complicated. In any case, it doesn’t look good for America.

  5. @bobchr

    Exactly, and the UAW would demand those 100 employees get $75 a hour, 90% pay if not working and 100% medical, if not, half of those iPad wouldn’t work right out of the box.

    It will be Government Motors all over again.

    Jesus I’m all for the working man making a decent salary, but $75 a hour is just too extreme for simple repetitive work on a line.

    Apple is in China to develop new customers for it’s products, if they had the unions we have, they wouldn’t be there, that’s a fact.

  6. @R2

    All the components (the A4 chip, the display screen, flash memory, other chip subsets, the casing, etc.) are all made in Asia anyway. What’d be the point of buying all that stuff to just put ’em together here with much higher labor rate, Workman’s Comp and other benefits, tax burdens, environmental laws, etc. to make it much more costly?

    All of Apple’s competitors (including US companies such as HP, Dell and Motorola) are getting their stuff made in Asia as well, so do you want to pay 50% more (at the very minimum) to well-over-double for American-made Apple products?

    This isn’t the result of the government isn’t trying to regulate our lives or businesses. This is all consumer-driven. We want more for less. We want bargains. We Americans are the ultimate bargain hunters. Think about it: 70% of our economy is based on retail consumerism. And we don’t want to work in an assembly line screwing in parts on phones or iPads all day. We’d rather work at the local mall selling shoes or some other “service” than be in a factory like some robot. We don’t want to mow the lawns or pick up the trash either, right?

  7. “This isn’t the result of the government isn’t trying to regulate our lives or businesses.”

    Typo there. Meant to say:

    The government isn’t trying to regulate our lives or businesses. In fact, this is a result of too little regulation in terms of how we deal with our trading partners in Asia. Too late now…

  8. Sorry, but all the whining about Apple manufacturing in China is just ignorant. The iPad wouldn’t be such a big hit if Apple didn’t benefit from each country contributing in its area of competitive advantage. A LOT of hardware AND software engineering, design, sales, and other good jobs in the USA have gone into the iPad and will continue to do so. SO WHAT if a few other nations also benefit, which also raises their salaries, so that they can now buy iPods and iPads and Macs, etc–which they do!!
    BTW, China has LOST a lot more manufacturing jobs than the US has over the last decade, because of automation and improved efficiency. All manufacturing, in all countries, is going the way of the agricultural sector: a lot fewer jobs producing a lot more product. Instead of whining, improve education as well as the business climate so we can actual compete for those engineering, design, and corporate HQ jobs here!
    (OK, Rant over.)

  9. @Original Jake

    Not a bad rant. Like R2 I am saddened that this country, for a myriad of reasons, is not competitive in manufacturing. And the reality is as you state. These iPad production lines are nothing like your fathers Detroit assembly line. A handful of people oversee a lot of automated machinery.

  10. “Only” 10,000 iPads per day = an iPad every 8.5 seconds, 24 hours a day.

    40m per year = 76 iPads a minute, 24x7x365

    I do think America needs to make things again. We have good investments in some areas. Conservative dipshits try to bash Obama with the “government motors” label, but the auto rescue forced unions to take huge concessions, saved hundreds of thousands of jobs, cost taxpayers nothing (in fact on track to make a profit), and forced industry to retool in a way that will make them more competitive and profitable. Those are the facts.

    Still, that is an industry where USA was a leader for a long time. Electronics has never been that way and likely never will be. We are too far behind already. Can you imagine a factory here turning out more than an iPad every second, 24/7/365? We do not have what it takes in labor, management, infrastructure OR government. All are needed, all must work together. Those who would blame the problem on only one of those elements, by guaranteeing conflict only help to keep the necessary cooperation from materializing.

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