It was a famous partnership between two outsize personalities — Steve Jobs, Apple Inc.’s intense and mercurial co-founder, and Terry Gou, the Taiwanese manufacturer’s equally demanding chairman.

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Walt Mossberg: Will there be an Apple product ever made again in the United States?
Tim Cook: I want there to be.
Walt: You what?
Tim: I want there to be.
Walt: You want there to be.

– Apple CEO Tim Cook and Walt Mossberg at D10, May 2012

When Apple announced its intention to manufacture one of its existing Mac lines exclusively in the U.S. last December, the company didn’t say which line, or where in the country it planned to build it. Now, some five months later, the answer to one of those questions has finally emerged.

During a Tuesday appearance before the Senate Permanent Subcommittee on Investigations, Apple CEO Tim Cook revealed the state in which its Made-in-USA Mac will be manufactured: Texas.

“We’re investing $100 million to build a Mac product line here in the U.S.,” Cook said. “The product will be assembled in Texas, include components made in Illinois and Florida, and rely on equipment produced in Kentucky and Michigan.”

Apple’s pledge to build some Macs in the U.S. doesn’t mean that the company is setting up its own production facilities. Cook has said in the past that Apple will work with manufacturing partners on this particular effort. And now that he has disclosed the state in which Mac production will be handled, the identity of Apple’s likely manufacturing partner is becoming clearer, as well.

Foxconn operates plants in Texas and has long handled a lot of Apple’s hardware production and assembly. Recently, the company said it was expanding its existing manufacturing operations in the U.S. to meet the needs of certain unnamed customers. Not definitive proof that Foxconn will manufacture Apple’s Made-in-USA Mac, but certainly a clear indication that it might.

Previously:

• Rumor Mill Adds Mac Mini to Apple’s “Made in USA” Plans
• Tim Cook: Apple Will Build Some Macs in the U.S. Next Year

Foxconn is the trade name for Taiwan-based Hon Hai Precision Industry Co. The Taiwanese company said Monday it has added about 10,000 assembly-line workers per week in Zhengzhou, its major production facility for iPhones, since the last week of March.

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Reporting first-quarter earnings, Hon Hai said revenue fell 19.2 percent from the year prior, to NT$809 billion. That’s well below the NT$895 billion analysts were expecting, and the largest drop in revenue the company has suffered since 2000.

The reason for the precipitous decline? Hon Hai won’t say. But it’s likely to have something to do with Apple. Between 60 percent and 70 percent of Hon Hai’s revenue is believed to stem from the company’s partnership with Apple. So when it posts ugly earnings like these, the quick and easy explanation for them is a slowing in demand for the iPhones and iPads it manufactures. As KGI Securities analyst Ming-chi Kuo told Reuters today, “This shows that Hon Hai’s revenue depends too much on Apple, and iPhone orders corrected more than expected.”

That may be true. But it’s important to remember that Hon Hai’s customer list stretches well beyond Apple, and boasts a number of big names, Hewlett-Packard, Dell, Nokia and Nintendo among them. Given the decline in the PC market, and continuing struggles at Dell, Nintendo and Nokia, it’s entirely possible that there are some other factors at work here, as well.

But that’s just speculation until Apple next reports earnings on April 23.

Hon Hai and Apple both declined comment.

Still, analysts said that the world’s largest contract electronics manufacturer, commonly known as Foxconn, may see its growth slow in the first quarter of this year and beyond, citing concerns over Apple’s sales outlook.

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The big change addresses student labor. It has long been a common practice among the third-party manufacturing companies known in industry parlance as Original Device Manufacturers or ODMs, to employ students to meet temporary spikes in work at factories. Schools are sometimes ordered to put their students to work by local governments.

HP has pretty much put its foot down on this, saying that all work must be voluntary, and students should be free to choose not to work, or to quit if they’re unhappy. Additionally, when any students do work, the job must be relevant to their studies. The number of student workers has also been limited.

As the electronics industry has shifted to use manufacturing companies in China, Western companies from countries with tougher labor standards have been under pressure from human rights groups to improve conditions of workers there.

Apple has over the years taken a great deal of heat for its relationship with Foxconn, the company that manufactures the iPad and iPhone. Apple responded by pressing Foxconn for changes, and has published an annual review documenting workplace violations of its standards, and actions taken to correct them.

HP said the suppliers were told of the new guidelines today, and are being asked to comply with them immediately, and that it will audit their compliance regularly.

As we’ve reported numerous times, HP isn’t planning on breaking up, even though there are many voices out there arguing that it should. CEO Meg Whitman continues to assert that the company is better in one piece than in pieces, and has reiterated that point numerous times. All indications are that the board, for now, supports her in this.

The reasons are pretty simple: HP is stronger in one big piece than it is in pieces. Being big gives HP a lot of leverage with the many companies it buys parts and components from, including Intel and Seagate, as well as manufacturing partners like Foxconn. Plus, despite the overall decline in the state of the PC business, the return on invested capital is strong enough to make staying in the business attractive. This is why Whitman cancelled a plan to spin off HP’s PC unit not long after taking the helm in 2011.

So when former HP CEO Carly Fiorina took to CNBC yesterday, the first thing she was asked about was her thoughts on a breakup. As the CEO best known for making HP significantly bigger with the huge and controversial 2002 acquisition of Compaq Computer, she conceded that there was a time during her stint as CEO that the board considered a breakup, along with other strategic alternatives. (Again, duh!)

The reasons the board didn’t go for a breakup then sound a great deal like the reasons that the current HP isn’t going for a breakup now. Watch:

IBM said today that it was granted 6,478 patents in 2012, which is also a record. The company has about 8,000 researchers and inventors working in 46 states in the U.S. and 35 countries around the world. The full tally of patents over 20 years amounts to nearly 67,000.

The next nine companies in the Top 10 list of patent recipients are:

• Samsung, which received 5,081 patents
• Canon: 3,174
• Sony: 3,032
• Panasonic: 2,769
• Microsoft: 2,613
• Toshiba: 2,447
• Hon Hai : 2,013
• General Electric: 1,652
• LG Electronics: 1,624

So what does IBM do that other companies don’t? I had a quick conversation with Katherine Frase, IBM’s VP for Industry Solutions and Emerging Business. “The process of getting to so many patents means that inside the company there’s a mindset that’s geared toward writing down what you do when do something that’s original and that has business value. There’s a tangible focus on writing things down. And you’ll write down five to 10 times the number of things that actually pass muster toward getting a patent. But that process keeps the notion of innovation at the front of your mind, not at the back of the mind,” she says. “It shows up in patents, and that’s an indicator, but the cultural assumption that innovation isn’t an accident but is made up of lots of little things that you remembered to capture along the way is more important than the patents themselves.”

So, what sorts of things did IBM receive patents for in 2012? Here’s a sampling:

U.S. Patent #8,275,803: System and method for providing answers to questions. Remember Watson? The talking supercomputer that cleaned humanity’s clock on the TV game show “Jeopardy,” and then followed it up by going to medical school and becoming a big-shot doctor working on treating cancer? This would be the patent on how Watson takes in questions expressed in natural language and returns an answer.

U.S. Patent #8,250,010: Electronic learning synapse with spike-timing dependent plasticity using unipolar memory-switching elements. If Watson weren’t enough for you at mimicking and improving upon humanity, IBM is working on something even more complex: Systems of Neuromorphic Adaptive Plastic Scalable Electronics, or SyNAPSE. It’s a project focused on cognitive computing aimed at emulating the workings of the human brain.

U.S. Patent #8,185,480: System and method for optimizing pattern recognition of non-Gaussian parameters. I don’t have the slightest idea what a non-Gaussian parameter is, so I’m not going to even try to explain this one, beyond saying that it has to do with recognizing patterns in data as the volume of information grows. One example IBM gives is traffic data: If you’re measuring traffic patterns, every day you get more data, and thus the patterns change and evolve, or existing ones become more pronounced and predictable.

There are 6,475 more or these patents from 2012 and, no, I won’t even try to list any more. Here’s a short video that IBM produced on the subject:

China's Ministry of Industry and Information Technology

The purpose of Cook’s trip wasn’t immediately clear, and Apple offered no explanation for it. What is known is that he met with Miao Wei, head of China’s Ministry of Industry and Information Technology, to chat broadly about China’s IT industry, global mobile communications and innovation. Beyond that, Cook’s agenda is a mystery. But China is an enormously important market for Apple. The company has nearly doubled the number of retail stores there since Cook’s last visit in March. Its manufacturing partner, Foxconn, is also based in China, and Cook has visited its factories on previous trips. Perhaps something like that is on the agenda this time, as well.

The most interesting question, however, is whether Cook will call on China Mobile. Apple still hasn’t inked an iPhone distribution deal with the company, mainland China’s largest mobile phone carrier. And it’s clearly in Apple’s best interests to do so. If, at long last, Apple was able to add the device to China Mobile’s portfolio, it would gain access to an additional 707 million subscribers — a massive addressable market, and one that Apple can’t afford to ignore much longer.

Update: Sources in position to know tell AllThingsD that Cook is joined on this trip by Phil Schiller, Apple’s senior vice president of Worldwide Marketing. They also say that a China Mobile meeting is on the agenda.

Occasionally reliable Taiwanese trade mag DigiTimes claims Apple is planning to move Mac mini production to one of manufacturing partner Foxconn’s U.S. facilities. Here at AllThingsD, we’ve heard similar chatter — nothing that would serve as hard confirmation, but enough to lend credence to the idea that Apple has at least considered the idea.

And certainly the Mac mini is a likely candidate for Apple’s U.S. production plans. It has fewer parts than the Mac Pro and iMac, and few “build-to-order” options, making it a better candidate for automated production. It’s also a relatively high-volume product, making it a good choice given the high upfront cost of establishing those automated production lines.

The flip side here, of course, is that the Mac Pro is an equally likely candidate for opposite reasons. It’s a low-volume product with high margins and a lot of “build-to-order” options. It’s also bulky and expensive to ship. Those, too, make a compelling argument for stateside manufacture.

Apple declined comment on plans to manufacture the Mac mini in the U.S..

Hon Hai in March said it would change its workplace practices after an audit by a U.S.-based nonprofit worker-safety group found widespread breaches of Chinese law and Apple policies at three plants, including the excessive use of overtime. Hon Hai responded by pledging that it would bring its overtime policies into alignment with Chinese law by next year, allowing workers to work no more than nine hours of overtime a week. The Taiwan-based company, also known as Foxconn, pledged to improve health and safety conditions at its campuses across China as well.

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Taiwan-based Hon Hai’s woes with its 1.5 million workers in China have run the gamut from underage workers and employee suicides to a full-blown riot at one plant in September. Foxconn, the trade name for Hon Hai, has also built new factories in inland China over the past decade and has occasionally faced difficulties attracting enough labor for the plants.

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Here’s her question, which you can find on page 48 of the transcript:

Crowley: Mr. President, we have a really short time for a quick discussion here. IPad, the Macs, the iPhones, they are all manufactured in China, and one of the major reasons is labor is so much cheaper [there]. How do you convince a great American company to bring that manufacturing back here?

The correct answer is that, under current conditions, which are highly unlikely to change no matter who is president, the job of assembling iPhones and iPads and other consumer electronics is now done mostly in China by companies that specialize in manufacturing, and will never come back to the U.S. And that’s okay.

Sadly, both Obama and Romney flubbed their answers, and educated voters not at all.

Romney made his response about how China is a currency manipulator and steals American intellectual property. Obama got started down the right path, correctly admitting that certain low-skilled jobs aren’t coming back, and mentioned “high-wage, high-skilled jobs.” But he failed to close the deal on his point. He then got off track talking about investing in research and training engineers. In part because the time was so short, neither delivered a clear correct answer about an issue that is widely and fundamentally misunderstood by most voters.

Here’s what one of them — either one, I don’t care which, and assuming no time limit — should have said in response:

“Candy, I understand how some people might get frustrated when they see Chinese workers assembling iPhones. It’s easy to think that those jobs rightly belong in America. The reality is a little more complex, but when you understand it, there’s a surprising amount of good news for American workers.

“The fact is, assembling iPhones and iPads is the final step of a complex process, and is really a low-skill, low-cost kind of job. China has spent decades building much of its economy around these low-skill jobs, in part because it has such a large labor force and plenty of workers who are willing to do the work. And, frankly, here in America you wouldn’t want to try to support a family on the kind of wages a job like that would pay. I know it sounds harsh, but it’s true. So I know this may sound odd when I say it, but I ask you to hear me out: I’m perfectly comfortable letting those kinds of jobs go to China or somewhere else.

“In fact, some researchers at the University of California at Berkeley found that for every iPad or iPhone manufactured, Chinese workers add $10 or less to the value of an iPad or iPhone. On an iPad, they found that American workers add $162 worth of value, and on an iPhone it was more than twice as much.

“In America, when we talk about manufacturing, we should be talking about advanced manufacturing jobs for highly skilled workers that require a solid education and pay wages on which you can support a family. And the fact is, there’s a lot of American work that goes into an iPad or an iPhone or a Mac.

“For one thing, there’s our semiconductor companies, like Intel, an American company that makes the most advanced and complex device ever created — the microprocessor — and that does it better than any other company in the world. It makes the primary brain that goes inside the Mac, most of the world’s personal computers and most of the servers that power the Internet. And most of those chips are made right here in California and Arizona and Oregon. Some are made in Israel, too. But most are made here in the U.S.A.

“And the microprocessors that go inside the iPad and the iPhone are made right here in America, too. Apple doesn’t make its own chips, and when it went looking for another company to help it do that, it picked a Korean company called Samsung. And where did Samsung decide to build these chips? Some place in Korea? No. The answer will surprise you: Texas. That’s right. Samsung operates one of its very biggest chip factories in Austin.

“Then there’s the shatter-resistant glass that you touch every time you use an iPhone or iPad. It was invented in America. And it’s made in America, too, by American workers at a company called Corning, in Kentucky and New York.

“And that’s just one piece of it. There are a lot of other great jobs held by American workers. Apple has a lot of smart designers who sweated over every little detail of how the iPad and iPhone look, and how they feel in your hand, and how the button works. Teams of software developers slowly, painstakingly designed and built and tweaked and refined the software that makes it so fun and useful.

“And we’re not done there. If you have an iPhone or an iPad, you have a favorite app. Right now, my favorite app is the one created by my campaign staff. And when I take a break on the campaign bus, my wife and I like to relax for a few minutes playing Words With Friends. She beats me every time. And how many apps are there? A million? A zillion? But that’s an example of another American company, Zynga, creating jobs for the people who create game software. And there are lots more Zyngas, some of them really small companies with just a few people, and some a lot bigger. Apple once counted, and said that there were more than 200,000 people working at jobs just making apps.

“And let’s not forget that just a little more than five years ago, this branch of the technology industry didn’t exist at all. Apple brought out the first iPhone in 2007, and the first apps started coming to the marketplace in 2008. And don’t get me started about Google and its Android phones and tablets, and the chips and software that go into those. Or Facebook, and all the interesting things it’s doing.

“So, to answer your question, Candy, I’m not terribly worried that American workers aren’t assembling iPhones and iPads in America. They’re busy doing more important jobs, and earning good wages doing it right here in America. And as president, I’ll do everything in my power to help encourage the creation of more jobs right here in America, and to encourage entrepreneurs to start new companies so they can create the next Apple or Google or Intel or Facebook.

“It’s something we in America do better than anyone else. And we can argue about the details of how we should go about doing that. My opponent and I have some strong differences of opinion on some of those things we might do, and you should learn about those differences and think long and hard about them, because they’re important. But, over the long term, when I look at the iPhone and the iPad, I see something that could only have happened in America. And I feel pretty good about the role the American worker plays in it. And so should you.

“Next question.”

=====
Update: A few people have pointed out that President Obama in his response to Crowley’s question got off to a better start than I initially gave him credit for. However, I don’t think he quite closed the deal on the argument. Then, owing I think in part to the tight time constraints, he got off track. Either way, I’ve adjusted that lead-in paragraph above to reflect this.

For the sake of discussion I’ve added the text of the full exchange below.

CROWLEY: Mr. President, we have a really short time for a quick discussion here.
IPad, the Macs, the iPhones, they are all manufactured in China, and one of the major reasons is labor is so much cheaper [there]. How do you convince a great American company to bring that manufacturing back here?

ROMNEY: The answer is very straightforward. We can compete with anyone in the world as long as the playing field is level. China’s been cheating over the years, one, by holding down the value of their currency, number two, by stealing our intellectual property, our designs, our patents, our technology. There’s even an Apple store in China that’s a counterfeit Apple store selling counterfeit goods. They hack into our computers. We will have to have people play on a fair basis. That’s number one.

Number two, we have to make America the most attractive place for entrepreneurs, for people who want to expand a business. That’s what brings jobs in. The president’s characterization of my tax plan …

OBAMA: How much time you got, Candy?

ROMNEY: …. is completely … is completely false.

CROWLEY: Let me go to the president here, because we really are running out of time. And the question is can we ever get — we can’t get wages like that. It can’t be sustained here.

OBAMA: Candy, there are some jobs that are not going to come back, because they’re low-wage, low-skill jobs. I want high-wage, high-skill jobs. That’s why we have to emphasize manufacturing. That’s why we have to invest in advanced manufacturing. That’s why we’ve got to make sure that we’ve got the best science and research in the world.

And when we talk about deficits, if we’re adding to our deficit for tax cuts for folks who don’t need them and we’re cutting investments in research and science that will create the next Apple, create the next new innovation that will sell products around the world, we will lose that race. If we’re not training engineers to make sure that they are equipped here in this country, then companies won’t come here. Those investments are what’s going to help to make sure that we continue to lead this world economy not just next year, but 10 years from now, 50 years from now, a hundred years from now.

So what’s causing the supply shortage? Here is Hon Hai Precision Industry Co.’s take. The company, based in Taiwan with factories across China, uses the trade name Foxconn Technology Group, and assembles many Apple products including the new iPhone.

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The Taiwanese company, which also uses the trade name Foxconn Technology Group, said that it had employed interns as young as 14 at its campus in Yantai, in the northeastern Chinese province of Shandong, for approximately three weeks. Hon Hai said it took “immediate steps” to return the interns to their educational institutions.

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