Why Apple is hiring more engineers in China

Despite a publicized push to transfer some production back to the US, it appears manufacturing jobs aren't the only ones difficult to move back home.

By MSN Money Partner Mar 4, 2014 12:22PM

A man walks past an Apple logo displayed above a street at a shopping mall in Beijing © Ed Jones/AFP/Getty ImagesBThe Wall St. Journal on MSN Moneyy Eva Dou, The Wall Street Journal

Apple's (AAPL) move to transfer some production back to the U.S. has been in the headlines, but that doesn't mean the iPhone maker is scaling down its China operations.  In fact, it's still expanding.

The Wall Street Journal reported Monday that Apple is poaching engineers from rival smartphone maker HTC and other Taiwanese tech firms, to build up its teams in Shanghai and Taipei.

The move is a reminder of the realities of globalization and the current limitations of factory automation. Industry executives and analysts agree that costs for robotic arms have to come down quite a bit before it would be cost-efficient to switch en masse to automated assembly lines for devices like smartphones and tablets. Until that happens, building an iPhone remains a labor-heavy process that is likely to stay in countries with cheaper labor such as China.

"Automation has its limitations," said Arthur Hsieh, lead analyst for UBS Asia technology hardware. "A product has to have a long life cycle to be suitable. And if demand is very volatile, then manual production makes more sense."

Apple's Mac Pro computers were a prime candidate for automation, with their long life cycles and relatively stable demand, which meant the same production line could be used for a long time without requiring an overhaul. The company brought some Mac Pro production lines back to the U.S. this year following political pressure to reduce reliance on China-based contract manufacturers who have come under fire for labor practices.

But the bulk of Apple's products can't be adapted to automated assembly lines quite so easily. All of Apple's iPhones and iPads are still assembled in China, and are not likely to move out in the near-term, analysts say.

Which brings us to engineers. Apple's close cooperation with suppliers to develop new products means that it is wedded to its supply chain in China. It needs engineers and managers on the ground to continuously monitor developments at its component suppliers and manufacturers. And as it plans a wider array of products, it needs more engineers in China than ever before and has been aggressively trying to hire them in Shanghai and Taipei.

That's why manufacturing jobs aren't the only ones that may be difficult to move back to the U.S.

More from The Wall Street Journal

Mar 6, 2014 12:18PM
Lets see...

No US regulations...  Lower pay...  No OBAMACARE...  They have profits overseas they need to spend overseas of face insane taxes if they bring them home...They get a better educated workforce...

I wonder if GOVERNMENT policies here have anything to do with the decision?

This is what happens when you elect a lazy, lying, corrupt, failed community organizer and his democrat henchmen.   
Mar 16, 2014 7:49PM
So how long does it take each worker to put a phone together.  5 minutes?  A $10/hr worker in the USA would add 83 cents to the cost of the phone vs 4 cents in China.  Then the phones would not have to be shipped to the USA, just the components which had to be shipped to the Chinese factory anyway.  Additionally, boosting the US economy would mean more Americans buying iPhones at U.S. prices instead of more Chinese buying them at Chinese prices.
Mar 21, 2014 1:19PM
Yeah, Papa Johns estimates it would cost 15 cents MORE per pizza to give it's employees health care! Apple is smart to keep that extra pocket change where it belongs. In the pockets of it's executives and shareholders! 

On a side note, after complaining loudly how much it was going to cost them to give health coverage Papa Johns continued to have mega pizza giveaways, discount pizza on Mondays and during big football games. Man it sucks to be a big corporate victim of decency.
Mar 10, 2014 1:55PM

So Apple does not care about the Chinese stealing their products. They already had fake Apple stores in China a few years ago. If Apple wasn't so crooked, they would build a better phone that would last and have software capability for upgrades instead of bringing a new phone out every 6 to 8 months for $500.00 each. Don't you Apple users understand that the day you buy that new released phone, the next new phone is already in production in China and in 6 to 8 months youe suckered to spend another $500? AND OVER AND OVER AGAIN!


If the U.S. will just lower the corporate taxes and quit giving money to countries who don't care about us like Afganistan, this country would be greater than ever. Keepe the money home. I know it's all about global postioning, but there has to be line drawn.


Get the manufacturing jobs back and more people will be employed creating tax revenue and not creating more unemployment claims.


We are no better since we broke from England. We are paying more taxes than ever.


Every politician is a puppet of corporate America. They are currupt once they start representing their people.

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