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Is Apple Moving iPad Production to Brazil? 148

zacharye writes "According to JP Morgan analysts Mark Moskowitz and Gokul Hariharan, Apple lowered fourth-quarter iPad orders 25%, the first time there has been a production decrease. This decrease has led some to speculate that the move is more than a response to lower demand, or a wish to operate with reduced inventory. Some insiders see this as a move in production from China to Brazil."
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Is Apple Moving iPad Production to Brazil?

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  • by crow ( 16139 ) on Monday September 26, 2011 @01:10PM (#37517294) Homepage Journal

    Brazil has the worst tariffs on imports. If Apple has decided that the Brazil market for iPads is large enough, it makes sense to move production there to avoid the tariffs.

    • by alen ( 225700 )

      there is also the americas trade zone or whatever it's called. I think anything made in each of the american continents can be sold tariff free here

      and the chinese new year is not the best scheduled holiday for 1Q product launches

      • No, there is not. Do a little bit of research before posting wrong information.

        http://en.wikipedia.org/wiki/Free_Trade_Area_of_the_Americas [wikipedia.org]

        • by meiao ( 846890 )

          Actually there is the Mercosul/Mercosur, which consists of only 5 countries, Brazil and Argentina are the biggest economies in South America are in it.
          http://en.wikipedia.org/wiki/Mercosur [wikipedia.org]

          But anyway, manufactoring in Brazil is a lot more expensive than in China.

          • From the grandparent: I think anything made in each of the american continents can be sold tariff free here

            Regardless of where 'here' refers to, the GP is wrong. And by referring to 'each of the American continents' (namely North, Central and South Americas) he/she could only be talking about ALCA. The Mercosur treaty, as you said, consists only of a few countries, and the name of the treaty itself is a contraption that means 'market of the south'.

            So you and all the AC's that replied to my post mentioning t

    • Hi all. Brazil is closer to the USA than China, and our senators approved a new law that Tablets will have discount on taxes, now it will be better to make it in Brazil than China. Our market is in expansion and we have more and more users buying Table as it first computers. Bye
    • In fact that's a important thing, we haven't seen Apple in Brasil since that happened: http://www.old-computers.com/museum/computer.asp?c=997&st=1 [old-computers.com]
  • by Anonymous Coward
    China = A hoarde of communist slaves working away in terrible conditions with one aim: World domination for the Chinese Communist Party and its authoritarian ways. Terrible human rights situation, censorship, people generally not allowed to do as they please by the government, most companies actually owned by the CCP, corruption, most of the women are either bitches or brainwashed into doing all they can to help Hu Jintao

    Brazil = Party all the time, hawt women everywhere, everybody is too busy having fu
    • Re:I hope so! (Score:4, Insightful)

      by rodrigoandrade ( 713371 ) on Monday September 26, 2011 @01:33PM (#37517594)

      Brazil = Party all the time, hawt women everywhere, everybody is too busy having fun and consuming liquids with a high concentration of ethanol to be too serious about such evil things as world domination, a generally happy and stress-free bunch of lads.

      True, it's party all the time over here, so we don't have to worry about corruption in government, high unemployment, high crime rate, high taxes, violence, crap public health and education systems, high taxes, crazy ass traffic, and other shit (besides high taxes) that leave this country economically far behind the other BRICs.

      The truly sad part is that a brazilian-made iPad won't be any cheaper than the imported model we currently have. Brazilias usually spend the most on gadgets compared to other nations, due to... you guessed it, high taxes. Even if we have it our way, Apple will get greedy and charge whatever the market will bear (i.e. possiby lower taxes becomes Apple's margin).

      And by the way, we drink acohol alright. Ethanol is for cars.

      • Oh, almost forgot. Saying that Brazil has hot women everywhere is like saying the US has Natalie Portmans and Megan Foxes everywhere. I've lived in both countries, so I know.

        • go to Rio Grande do Sul, Florianopolis, there are Nats a Foxies everywhere...
        • I have also lived in both countries and can attest that Brasil has a much higher concentration of hot women than the USA does - speaking in general. But beauty is in the eye of the beholder I suppose.
          • I have also lived in both countries and can attest that Brasil has a much higher concentration of hot women than the USA does - speaking in general

            I have no problem believing this, the difference between our populations is obvious (2010 Int. Obesity Taskforce [allcountries.org]). Note that the rates aren't directly comparable, as Brasil also has a more youthful population distribution which skews obesity numbers -- but I suppose that plays into the "hotness" distribution too:

            Obesity Rates:
            Brazil: M 8.9% | F 13.1%
            USA: M 32.3% | F 35.5%

            "Nations have passed away and left no trace,
            and history gives the naked cause of it--
            one single, simple reason in all cases;
            they fell because their people were not fit."

            -- Rudyard Kipling

      • by Trogre ( 513942 )

        You drink, but ethanol is for cars? What do you drink, propanol?

    • by morcego ( 260031 )

      I wish really that the jobs could be kept in the US because all this outsourcing has brought quite a lot of poverty to the place and the real cost is in the resulting unemployable underclass the US now has to support.

      Well, that's what you get when you keep demanding lower prices.

      Americans can be quite organized when they want. They have campaigned and blocked trade of various products in the past, by simply refusing to buy them (wasn't there something about tuna ? They refused to buy it until they started u

    • not only that china has no worker / plant safety.

      After that high speed rail crash they moved to fast to cover it up.

      China also likes to copy stuff on the cheap and cut corners all over the place.

  • This may just be Hon Hai deciding to move some production capacity. Hon Hai makes the products, remember. Apple is a "hollowed out" company, with no manufacturing capability.

    Historically, that's the beginning of the end. The day may come when Apple is just a brand name licensed to real manufacturers. That's what Westinghouse [wikipedia.org] and RCA [wikipedia.org], once major companies, are now.

    • Not necessarily (Score:5, Insightful)

      by Sycraft-fu ( 314770 ) on Monday September 26, 2011 @01:28PM (#37517524)

      There are companies that don't manufacture, but still do real work. nVidia is a great example. They don't fab their chips, TSMC does. They also don't build the cards (other than reference boards for OEMs to look at) OEM partners like eVGA do. However they make a lot of money and it isn't off of patent trolling or something. What they do is design the chips. They have shitloads of R&D and simulation and so on and their engineers design the chips, write the drivers, and so on. That they don't own the facilities to make them is of no real consequence. It isn't like someone else could just up and make a graphics chip with no effort. The R&D is as hard or harder than the manufacturing.

      Not saying that is quite the same for Apple, just saying that you don't have to be a manufacturer to be doing something worthwhile.

      • by Belial6 ( 794905 )
        A good example is grocery stores. How many grocery stores do any food production? As far as I know, none. Some might have a bakery on site but they are still getting the parts from some other manufacturer. Grocery stores are definitely doing real work, and something worthwhile.
        • by swb ( 14022 )

          Grocery stores generally don't sell meals, though, they sell ingredients for meals. In this way, they're kind of like a parts retailer, not like Apple.

          The food equivalent of Apple would be something like TGIFriday's ("Flinger's") -- they really aren't anything more than a brand. They sell complete meals supplied to them by food service vendors; the only thing they provide is the branding.

      • If you have production and want to have design, what do you do? Hire engineers, it costs something in the order of $100 k in tuitions to create a new engineer, there are thousands of engineers graduating every year all over the world.

        If you have design and want to have production, what do you do? Building a new factory costs on the order of $1 billion, that's four orders of magnitude more than educating someone to be an engineer.

        Giving priority to design over manufacturing only works as long as there is exc

        • by Sycraft-fu ( 314770 ) on Monday September 26, 2011 @04:39PM (#37519844)

          First, since you like talking capital outlay, look in to the equipment they have for their development. Thousands of high end servers, a massive Cadence simulator, high end test equipment, and so on.

          Then look at their people. It isn't one guy. It isn't 10 guys, it is thousands. Those salaries start adding up.

          You are talking a lot of equipment and a lot of people. It isn't one guy sitting with a desktop.

          Finally, just have a look at others that have tried. The market is littered with those that just couldn't compete with nVidia and ATi. You have some like S3 and Matrox that couldn't keep up and so stopped trying, producing only low end ans specialty parts. You have others like 3dfx that did well, but then fell because they couldn't adapt fast enough. You have still others like Bitboys that never managed to launch a product.

          Hell Intel even failed. They were trying to launch a dedicated GPU, the Larabee, and it ended up not working out and was canceled. This is from a company that designs processors, has done basic graphics, and fabs chips. They still couldn't compete.

          What nVidia does is highly technical and very difficult. It isn't something you do by hiring an engineering grad and telling him "go to it." It is a massively expensive process.

          • by mangu ( 126918 )

            This is an unstable situation, when development is following many dead ends.

            Look at what happens when designs begin to stabilize. Intel lost the memory chip business decades ago, because they couldn't fabricate them cheaper than the Asians could.

            In the CPU and GPU market perhaps the advantage American companies have is cultural, the Asians do not have the same experience in software development. Anyhow, companies like Intel and nVidia do a lot of research in production too, it's not as easy as telling a chi

          • by UpnAtom ( 551727 )

            There are lots of rumours of management at ATI trying to cut corners on individual chip development so that their chips come out cheaper but slower than nVidia. I don't know if this would acknowledge that they can't keep up, that the innovations are going to run out leading to easier designs or merely bad management opening the door for another newcomer.

    • Westinghouse and RCA _ACCEPTED SHIT_, not quality, from their subcontractors.

      Quality is a choice.

  • by UnknowingFool ( 672806 ) on Monday September 26, 2011 @01:26PM (#37517492)

    So based on rumors, JP Morgan analysts lowered production forecasts which leads to speculation that iPad is moving production to Brazil. I don't know if I would place much stock in these analyst forecasts. They're almost never right. When the iPad 2 first came out some analysts forecasted really high numbers like 8M the first quarter only to downgrade them later. Their reasoning was since the iPad 1 sold about 7M the previous quarter, the iPad 2 should outsell it. Well the analysts did think that the previous quarter being the holidays or that it might take time to ramp up production for a new product were factors.

    Right now it's only rumors that Apple has cut orders to their existing suppliers. It may not be true. Even if it were true, if Apple has done so to bring on more suppliers nothing says those new suppliers are Brazilian. It might be that Apple is simply bringing on other Asian suppliers. Some people are speculating that this means the iPad 3 will launch soon. I would think it is more likely that Apple has cut orders because they are about to launch the iPhone 5 (or whatever it is called) and the iPad 2 shares more of the same components with the iPhone 4.

    • Analysts. Is there nothing they can get right?

      http://daringfireball.net/2010/09/kumar_track_record [daringfireball.net]

      • Betting on a 7-inch iPad based on a Kumar research note is pretty much like betting on the time of day based on a stopped clock.

        That's those pesky "Analysts" in a nutshell.

    • So based on rumors, JP Morgan analysts lowered production forecasts which leads to speculation that iPad is moving production to Brazil. I don't know if I would place much stock in these analyst forecasts. They're almost never right. When the iPad 2 first came out some analysts forecasted really high numbers like 8M the first quarter only to downgrade them later.

      Well, it depending on how you count, they were right. In FQ2011, the first the iPad 2 was available, they only sold about 2.5 million of them - in the 3 weeks from March 15th.

    • by MikeURL ( 890801 )

      There is almost no way that Apple is cutting production. If anything Apple is going to have a tough time keeping up with demand this holiday season.

      All the mindshare is on tablets right now. That does not mean that notebooks are dead but it does mean that the marginal consumer is breaking toward a tablet right now. Even the eee pad slider, which no one knows about, sold out at 2 of the 3 big retailers (B&H and Newegg) within just a few days of being released.

      If the tablet market were falling apart--w

  • by spiffmastercow ( 1001386 ) on Monday September 26, 2011 @01:40PM (#37517676)
    Producing stuff in Brazil might be a bit more expensive in the short term, but they're a lot less likely to steal all of your R&D and sell it to your competitor.
  • Brazil just reduced taxes for tablets produced within the country. Apple may or may not be moving its production to Brazil, but it is certainly interesting that this speculation come right after this Brazilian gov't move. Also, there is Mercosul, which is an area of (almost) free commerce in South America that has Brazil, Argentina, Uruguay, Paraguay and Chile as members (Venezuela is also part of Mercosul, I think).
  • by gnasher719 ( 869701 ) on Monday September 26, 2011 @01:43PM (#37517704)
    "Insiders" don't have to make stupid guesses what this might mean. Insiders _know_ what Apple is doing. That's because they are inside, and that's why they are called "insiders".

    The people making guesses about a production move to Brazil are either overpaid information whores who don't have a clue, or some random MacRumors poster, not having much more of a clue, but at least not pretending and getting paid for it.
  • by morcego ( 260031 ) on Monday September 26, 2011 @01:44PM (#37517716)


    Aolizio Mercadante, the Brazilian Minister of Science and Technology, confirmed to the press earlier this month that Foxconn’s Jundiaí, Brazil factory is ready to begin production

    I would take that with a grain of salt. Mercadante and his political party have strong root and support from blue collar workers. Heck, their party name can be translated as "Workers Party". So this could be nothing more than a political move to increase his popularity with his support base.

    Mercadante + Foxconn ... Yeah, that's a source you are really trust ...... NOT.

  • Or is that Columbia? Not sure.

    Anyhoo- with the coffee powered car article + iPad = 3x perfomance! Yee ha!

  • From our data is looks like the other Big "A" is also making investments in Brazil. http://www.cedexis.com/is-amazon-cloudfront-in-brazil/ [cedexis.com] Ed ed@cedexis.com
  • Sure it's been 25 years, but you'd think that Apple would still be pissed about the Unitron Mac 512 debacle.

    http://lowendmac.com/clones/unitron.html [lowendmac.com]

  • How about the fucking radiation pouring out of Fukushima? Japan? It's a goner. It would be more merciful at this point if a giant earthquake or tsunami wiped out the whole continent. Less suffering, no horrible birth defects, no prolonged (or swift) and agonizing deaths due to radiation poisoning, no parents having to watch their kids die. Nuclear power? I call bullshit.
  • Brazilian government has announced several incentives for tablet production in Brazil:

    http://www.sourcingbrazil.com/tablet-tax-cut-game-changer-for-brazil-it/ [sourcingbrazil.com]

    Additionally, the law for informatics (lei de informática) ensures huge tax cuts for companies investing money in R&D, and this could be almost anything related to HW or SW development. Add to that the fact that Brazilian products has easy access to all Latin American market and one will that this decision seems very rational and expe
  • Hello,

    I just read a related news about Microsoft starting to build Xbox 360 in Brazil (portuguese only):

    http://oglobo.globo.com/tecnologia/mat/2011/09/27/microsoft-confirma-fabricacao-do-xbox-360-no-brasil-reduz-preco-do-console-em-40-925453959.asp [globo.com]

    The prices will decrease 40% in average for local customers.

Did you hear that two rabbits escaped from the zoo and so far they have only recaptured 116 of them?