Dec 4, 2012, 9:42 am EST | By Brad Moon, InvestorPlace Contributor
Two potentially huge Apple (NASDAQ:APPL) items hit the radar in quick succession over the past few days.
First came rumors that the company was in talks with Intel (NASDAQ:INTC) to replace Samsung as the processor supplier for its mobile devices. Then, as the first shipments of Apple’s new iMac PCs arrived, reports rolled out that at least some of them bore an “Assembled in USA” sticker. CEO Tim Cook rose to prominence at Apple for moving production to China, but could the company be on the verge of a shift back to “Made in America?”
If Intel manages to score the coup of becoming the chip supplier for Apple’s mobile devices, that would be a big story for both Intel and U.S. manufacturing. It was only weeks ago that Apple was supposedly in talks with Taiwanese chipmaker TSMC (NYSE:TSM) about the possibility of replacing Intel CPUs in its PCs with TSMC chips based on ARM (NASDAQ:ARMH) architecture.
Intel CEO Paul Otellini (the guy who brought Apple into the Intel fold but failed to break into the mobile market) retires, and all of a sudden Apple and Intel appear to be making up for lost time. With most of Intel’s chip fabrication plants in the U.S. (including factories in Oregon, New Mexico and Arizona), domestic manufacturing would benefit tremendously. Apple sold 43 million iOS devices last quarter alone — that’s a lot of chips.
Then there’s the story of the “Assembled in USA” iMacs that’s burning up the tech sites right now. Some (but not all) of Apple’s latest iMacs have been arriving on doorsteps adorned with the usual “Designed by Apple in California” message. But instead of “Assembled in China,” they’re marked “Assembled in USA.”
The FTC has very specific rules about how to qualify for that label. To comply, Apple has to be doing much more than just screwing bases onto cases. A factory somewhere in the U.S. has to be building these things.
How could you justify assembling a computer in the U.S. if you can pay ridiculously low wages in China? First of all, those low wages aren’t as low as they used to be. According to The Atlantic, they’re five times what they were in 2000 and expected to continue rising at the rate of 18% per year. At the same time, U.S. labor productivity has risen, while U.S. manufacturing wages over the past five years are now back at the level they were in 2000, adjusted for inflation.