Can Trump Really Get Apple to Produce its Phones in the USA?

Credit: Illustration by Owen Smith / Chart illustrations by Luke Shuman / Data from IHS, Apple, Jason Dedrick, Alex King

That’s the bold statement Mr. Trump made before being made president, but can he deliver this or is it just another sales pitch? Also, what would this actually mean for Apple? Well, the answer to the first question would be no, at least not instantly. Apple doesn’t just go to China to have their phones manufactured for the cheap labor costs; they also have a lot of skill and flexibility that isn’t found in many other parts of the world.


But, even if Apple did decide to open up shop in the USA and start manufacturing there, would this be a viable option for the company? On the outset, it looks quite possible that the company would profit from producing iPhones in the USA. But, upon closer scrutiny, it becomes clear that there is a catch. If Apple were to start producing its phones in the USA in addition to China and Brazil, the price of the iPhone would need to increase by around 5 percent. This is partly due to the higher labor costs of the USA to that of China or Brazil, but mainly due to the shipping and transportation of parts costs that they would incur.

Apple has suppliers in 28 countries …
An artist’s rendering of an iPhone deconstruction that was performed by the analyst firm IHS.
Apple has said the U.S. lacked the manufacturing infrastructure needed for the iPhone. But if it could find a way to get it done domestically, what would phones cost?


but most of them are concentrated in just four countries. Apple requires a vast labor pool, but most of those people work for other companies.
An iPhone contains most of the elements in the periodic table, including ones not mined in the United States.

So what if the parts were made in the USA, you might be wondering? Well, one of the most expensive components of the iPhone is its touch screen made from Gorilla Glass that costs around $20 per phone. Both the processor and modem cost around $15 each and the power chip around $6.50. Add another $15 for the radio amplifiers and transceivers, and we’re just about there. But, even if the parts costs were the same in both countries, there are still other factors to consider, such as the increased cost of labor in the USA. Even if it doesn’t quite amount to an additional $30-$40 per phone as suggested by Jason Dedrick, a professor at the School of Information Studies at Syracuse University, any amount will make a difference.


However, there is still a geographical issue that isn’t quite so easy to get over, and that is most of the 75 elements needed to make an iPhone are not mined in the USA. In the words of David Abraham, author of The Elements of Power, “no tech product from mine to assembly can ever be made in one country,” and that goes for the iPhone too. So, I’m sorry Mr. Trump, but it’s very unlikely that Apple will begin manufacturing the iPhone in the USA anytime soon.

Related Links; 


More News To Read

Comments

comments