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Apple to Put Down Roots in Arizona

By Rachelle Dragani MacNewsWorld ECT News Network
Nov 6, 2013 3:44 PM PT

Arizona this week welcomed Apple with open arms. The company will be opening a manufacturing facility there as it ramps up U.S. operations.

Apple to Put Down Roots in Arizona

The new plant will house production of sapphire materials as part of a US$578 million deal between Apple and mineral crystal company GT Advanced Technologies. Apple uses the sapphire materials in some of its consumer devices -- for instance, to create the camera lenses in some iPhone models.

Apple's investment in material production and its enhanced R&D efforts could result in new, cost-effective uses for the material, GT suggested.

The manufacturing facility will be located in Mesa and is expected to employ 700 people. An additional 1,300 jobs will become available for the construction and management of the facility.

Apple's plan to run it on renewable energy will go a long way toward creating a greener power grid in Arizona, said Gov. Jan Brewer.

Arizona Attraction

The fact that Mesa is a rising education hub likely influenced Apple's decision, said Joseph Pastore, professor emeritus at Pace University's Lubin School of Business.

"Companies like to locate where there is talent," he told MacNewsWorld. "[Mesa] has been undergoing an interesting initiative to bring higher education to its city. It has attracted five colleges from various points in the U.S. to add branches in Mesa. The fundamentals for plant location in Mesa are emerging in the form of a concentration of an educated workforce."

Made in the USA

This isn't Apple's first move to bring some of its manufacturing operations closer to home. The company announced earlier this year that it would invest $100 million to assemble its Mac Pro line in the U.S.

"It is a hedge against the uncertainties of doing business in parts of the world where political, social and economic happenings are, yes, growing -- but as with all, growth fraught with uncertainty," Pastore added.

The Mesa plant will be responsible for just a tiny fraction of Apple's massive global manufacturing needs. Yet even that small effort can go a long way toward disspelling some of the discontent that comes from the company's reliance on an overseas supply chain for the bulk of its products, said Trip Chowdhry, senior analyst for Global Equities Research.

"Many Apple users are going to keep buying Apple products no matter what," he told MacNewsWorld, "but reports of unfair labor conditions in China, the rising cost of operating a supply chain across the world, and high unemployment in the U.S. can all add up to turn some people against big tech giants like Apple. Any effort to increase domestic production is going to be a point in their favor and may end up helping their bottom line, too."

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