Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Apple, Lenovo, and Google Are Bringing Production Back to the US, but Should We Celebrate?


The production of state-of-the-art electronic devices largely remains an international enterprise, and this is unlikely to change.

Lenovo (OTCMKTS:LNVGY), the world's second largest PC vendor, showed off its new computer plant in Whitsett, North Carolina in mid-June. At about the same time, Apple Inc. (NASDAQ:AAPL) officially announced that its newest Mac Pro workstations would be assembled in the US. And back in May, Motorola (NASDAQ:GOOG) announced that its new flagship smartphone Moto X was going to be built in the US.

So, is electronics manufacturing finally heading onshore? Or does the devil, as usual, hide in the details? There are reasons to both celebrate and remain skeptical about the emerging trend. Let's look at some of the recent news.

Apple: The Cupertino giant announced its plans to bring some production back to the US in 2012, and in 2013, the company revealed more specific information: The products that will be built in the US are the new futuristic-looking Mac Pro computers.

The company is investing $100 million in the onshoring effort, said Apple CEO Tim Cook. He said that Macs Pro "will be assembled in Texas, include components made in Illinois and Florida, and rely on equipment produced in Kentucky and Michigan."

However, Apple is likely to cooperate with its long-established Taiwan-based partner Foxconn (TPE:2354) or even Singapore-based Flextronics (NASDAQ:FLEX) instead of creating its own production infrastructure.

Lenovo: As mentioned above, China-based Lenovo is another big name in the computer industry trumpeting the idea of building PCs in the US. The company launched US production of its ThinkPad laptops and desktops in January, reaching full production power in June with the official opening of its 240,000-square-foot facility. The opening of the North Carolina plant added 115 new manufacturing jobs to the area, and that number might go up late in the year as the company expands the plant's production line to include tablets and servers. The tech giant was not a newcomer to North Carolina; Lenovo has previously established logistics, customer solutions, and national returns centers in Whitsett.

Google and Motorola: Pulling on the heartstrings of patriotic Americans this week, Motorola has made American-made the key selling point for its new Moto X smartphone: "The first smartphone designed, engineered, and assembled in the USA is coming," states an ad released just in time for Independence Day.

In discussing the move, Motorola highlighted some of the benefits it sees in onshoring, including the ability for its production department to better coordinate with engineers in Illinois and California, which should result in faster design iterations. A leaner supply chain and streamlined logistics will help Motorola ship devices faster. The company also expects to "respond much more quickly to purchasing trends and demands."

Motorola CEO Dennis Woodside said that 70% of components for its new flagship smartphone would come from the US. The enterprise will create 2,000 jobs in Fort Worth, Texas. However, Moto X devices shipping to other international markets will be produced in China and Brazil by Flextronics, which will also operate the plant in Texas.
< Previous
No positions in stocks mentioned.
Featured Videos