Apple to Manufacture PCs in the US – Big Mistake

This is how PCs are made!

Apple has recently announced that it will move manufacturing production of one of its PC lines exclusively to the United States in 2013. The speculation is the iMac line, as some of the newer units have already been labeled with “Assembled in USA”. The cost of this move is going to cost the electronic¬†behemoth $100 million.¬†Even though it is a wonderful PR move for Apple, it reeks of financial disaster. Investors already know this, which is why the stock dropped 5% the day before the announcement. It’s a terrible idea for two reasons: 1) this will undoubtedly lower the margin of profit per PC or it will 2) raise the price of PCs. Apple already charges a premium on its PCs relative to the rest of the commercial computer industry, so raising its prices could be harmful. Not raising the prices of the PC line will lead to smaller margins, which will hurt Apple’s bottom line. Throw in the $100 million capital to jump start this effort, and you are creating some real pain for investors.

On the contrary, Apple has so much cash that it uses 100-million-dollar-bills as toilet paper. Apple also makes the majority of its money from iPods, iPhones, and iPads – so sacrificing one of its desktop production lines for good PR might actually make it a pretty reasonable marketing move. All in all, the move will probably end up being a wash for the company and have very little or no impact on the company. So… sorry for wasting your time reading this post. Email your rage at stepasideshow@gmail.com