Apple looking into manufacturing iPhones in U.S.

By , Nov 17, 2016

iPhone 7 jet black manufacturing image 005

U.S. President-elect Donald Trump repeatedly said during his campaign that he would force domestic technology companies like Apple to build its “computers and things” in the United States.

One time, he even openly called for boycotting Apple products unless the company doesn’t bring back manufacturing jobs it had outsourced to China many, many, many years ago.

Japanese outlet Nikkei is reporting today that iPhone contract manufactures Foxconn and Pegatron were approached recently by the Cupertino firm regarding the possibility of establishing iPhone manufactories in the United States.

“Apple asked both Foxconn and Pegatron, the two iPhone assemblers, in June to look into making iPhones in the U.S.,” a source said. “Foxconn complied, while Pegatron declined to formulate such a plan due to cost concerns.”

iPhone 7 plus back large camera

Another source said Asian supply chain thinks that U.S. President-elect might push Apple to make “a certain number of iPhone components” at home. Yet another industry source said that it’s not easy to make iPhones in America “unless the U.S. government subsidizes local companies for producing domestically.”

iPhone chip maker TSMC may also establish U.S. plants, but that firm’s made it very clear that it’d be much more pricier to make iPhone chips outside of Taiwan.

Foxconn and Pegatron manufacture more than 200 million iPhones annually.

Some components for Macs, but not iPhones, are currently being built in the U.S. For instance, Apple supplier Flextronics has been producing Mac Pro enclosures at a plant in Austin, Texas since 2013. And in 2012, Foxconn established an iMac assembly line in the same state. Sharp recently hinted that it might establish a U.S. facility to build OLED panels for future iPhones “if our key customer demands us to manufacture in the U.S.”

Here are some of the complex manufacturing steps involved in producing the pristine-quality fit and finish of the iPhone 7’s Jet Black colorway.

Bringing manufacturing jobs back home may be easier said than done, with Apple’s boss having been repeatedly saying that those jobs have been long lost to China.

With a typical monthly wage of a Foxconn assembly line worker hovering slightly above $200, Apple would need to persuade its shareholders to cope with diminishing returns on their investment due to increased labor and production costs stemming from hiring U.S. workers to assemble iPhones and other gadgets.

Indeed, Foxconn Chairman Terry Got had reportedly been “less enthusiastic” about moving iPhone production to the States due to an inevitable rise in production costs.

“Making iPhones in the U.S. means the cost will more than double,” the source said.

iPhone 7 jet black manufacturing image 001

It was investors that pushed U.S. technology companies to outsource most of their production overseas in the first place. Chalk that up not only to this age globalization and free trade, but also to Wall Street’s greed and quest for ever-increasing profits at the expense of workers and their families, no matter the country where they happen to live.

iPhone 7 jet black manufacturing image 006

“We’re going to get Apple to build their damn computers and things in this country instead of in other countries,” Trump said at Liberty University in Virginia in January. In March, Trump asked rhetorically, “How does it help us when they make it in China?,” during his Super Tuesday victory speech.

Chinese government warned that if the Trump administration goes ahead and starts a trade war with them, “U.S. auto and iPhone sales in China will suffer a setback.”

iPhone 7 jet black manufacturing image 004

Be that as it may, the new administration is going to face an uphill battle in convincing corporations and their powerful investors that bringing those very low-paying jobs from China back to the United States would be in their best interest.

Tim Cook said on CBS’ 60 Minutes that it’d be next to impossible to move iPhone production back to the U.S. due to a lack of infrastructure and required skills.

“To make iPhones, there will need to be a cluster of suppliers in the same place, which the U.S. does not have at the moment,” he said. “Even if Trump imposes a 45 percent tariff, it is still possible that manufacturers will decide to continue production overseas as long as the costs together with the tariffs are lower than the amount they need to spend on building and running production lines in the U.S.”

According to U.S. think-tank Economic Policy Institute, America had lost a whopping five million manufacturing jobs between 2000 and 2014.

Source: Nikkei

  • Share:
  • Follow:
  • I’d like to see built/assembled in the U.S.A on the iPhone..

    • Anonymous

      Are you willing to pay double the cost though? Perhaps even more, are you willing to take the loss of dividends for your 401K, assuming apple is in it. And most likely apple is in it.

      • Of course not, Who would want that, all I said what “I’d like to see it on the phone”, the bad that comes with it can gtfo..

      • Jake1047s

        So you don’t understand how its bad? Im really just trying to fully understand your view.

      • it’s simple he just wants his phone to
        say assembled in the USA

      • Bugs Bunnay

        I agree with you. I’d like to see jobs coming back from overseas. Trump is also going to slap Ford with a tariff if they bring their production to Mexico.

      • Mark S

        Aww come on we have enough Americans in this country with shit paying jobs (burger flippers, gas pumpers). No reason Apple can’t do this too.

      • Anonymous

        There are plenty of high paying jobs in america… you just need to get an education. And even then if you dont want to there are still good paying jobs if your will to do hard labor.

      • Kaptivator

        Indeed!!

    • Joey_Z

      get a sticker and tape it on the back of the phone?

  • PAULALLstar

    Lets hope Apple products won’t see a 1000% markup!

    • Rowan09

      Markup in what?

      • PAULALLstar

        Price for products. You do know people in china are making literally nothing to produce apple and other tech products from US companies and distributors.

        A plant worker in the United States would start at a average of maybe 25-35 to make a IPhone! That would mean apple would see a huge decline in profits and the only way to balance that out would be to either use cheaper components or pass the cost to retail.

        The only other option is to have a fully automated build process and facility that needs as few people as possible. And the only jobs would be maintenance on machines and quality checks.

        Either way bringing jobs back to America spells some sort of give and take. And I don’t think people will like the give part.

      • Rowan09

        I understand but look at the price point an iPhone would be according to your percentage. The US won’t have people like China building phones it would be more automated. In regards to China you shouldn’t try and compare US pay to Chinese pay rate because these jobs at Foxconn and Pegatron are highly sought after jobs. It will be interesting and wouldn’t make any sense for a company to lose by making a move. If Apple makes this move it would mean the government must be giving them something in return like tax breaks.

      • PAULALLstar

        If you look at the job market in China it’s not hard to imagine why you might want to make phones vs being in fields or working construction or serving your country.

      • Joey_Z

        Isn’t the purpose of bringing back manufacturing is to hire more people? Automation sure can lower the cost, but in this context, why bother…

      • Rowan09

        Because Apple or any other company cannot afford to just give away money just to be “patriotic”. The only rule in business is to make money and America is not at all like China. People are going to need health care, vacation days, sicks days, etc (not saying those things don’t exist in China because I don’t know) and won’t want to get minimum wage either. The government is going to have to give some serious tax breaks to make it worth while of any company.

      • Joey_Z

        exactly as I said why bother…

      • Rowan09

        Because it will provide jobs, how much is yet to be known.

      • Anonymous

        Ah! Man who understand the logic here, and the reason for globalization.

      • PAULALLstar

        The agenda will be pushed and people don’t get the consequences of such action and reaction.

      • Bill

        Factory workers in the US would not make 25-35 per hour to assemble iPhones. Try $10 per hour for the vast majority of places.

        Still a lot more than their Chinese counterpart but nothing like you’re talking about in regards to that point.

  • AMB_07

    Trump supporters about to credit this story to Trump in 3, 2, 1….

    • Rowan09

      Who would deserve some of the credit?

      • AMB_07

        Well naturally Apple, it’s not like there was any real pressure on them to do it.

      • Rowan09

        So President Elect would get none?

      • AMB_07

        Trump has had and still has no influence in Apple’s business practices. And realistically Apple must have thought and discussed about that internally long before Trump even suggested the idea. Also let’s not get started on how this was never originally Trump’s idea to begin with.

      • Flyboyron

        If you refuse to give him any credit for changing (or at least pointing out) how Americans are thinking, then why are people so quick to credit his predecessor with anything good that happens? Either the President has the power to change things, positively or negatively, or he doesn’t. But you can’t give credit only to Dems and not to Repubs.

      • AMB_07

        Because his predecessors have actually got things done, Trump isn’t in office yet. I don’t care what president belongs to which party, mainly because I’m not american and your president holds no importance to me.

      • Bugs Bunnay

        Correct. They brainstormed every possibility of the best and worst. They are ready.

      • Anonymous

        Well I don’t think trump should get it…. after all his ties and hats are made over seas. Lol

      • Rowan09

        Lol smh

      • Mr_Coldharbour

        His toupees also.

      • Flyboyron

        Let’s see… Which has the most effect on our economy? DUH! I’ll bet you’re a Hillbot, or didn’t even vote…

    • B.A.M.F.

      soooo, who would the credit go to??

  • chjode

    I’d pay a $100 cost premium for a Made in USA iPhone.

    • Jordan

      They said it’d cost more than double

      • chjode

        Sorry, I submitted too quickly. I’ll edit accordingly.

      • PAULALLstar

        It defiantly would be more than potentially 5x as much.

        People forget Chinese workers are making peanuts while being exploited for services.

        That would not fly in America. People would want 25-35 to start, full healthcare, dental, paid vacation, sick leave, holidays etc. etc. etc.

        That is something Apple has never had to deal with and if it did they would have to make serious changes to their price structure.

        If people thought the new MacBook Pro was a price jump wait till all that stuff is made out here!

        It will model prices of computers and tech of the 1980’s

      • Rowan09

        No really true. Craftsman was made in the US for years and now they are made in China and the price is still the same and not that expensive compared to other brands. Apple would get some serious tax breaks if they are giving some on profit of each iPhone/iPad/etc.

      • PAULALLstar

        Notice the big thing you said they use to be in America and now they are in China! The price can stay the same but I would guess their margins for profit are wayyyyy higher due to exploited cheap labor .

      • Rowan09

        Right but if Apple makes this move the government will have to give them some serious tax breaks. As you stated no one wants to work on an assembly line in the US, but maybe Apple can produce some parts here and assemble them in China.

      • Anonymous

        Not to mention currency exchange rates, it can cost apple even less when the dollar is strong to manufacturers over seas. I’m with you bro, the iphone is made in to large of volumes to be made here for cheap.

      • PAULALLstar

        Nobody gets it

  • I’ve yet to believe a single word he’s ever said.

    • Flyboyron

      Then you are the one with the problem.

  • 5723alex .

    “Apple looking into manufacturing iPhones in U.S.

    In short, NO.

    Apple will never be able to manufacture iOS device in the U.S. The best Apple can do is assemble iOS devices in the U.S.

  • Rolf Bause

    Prepare for a 1699,- entry level iPhone, made in the U.S. of A 😀

  • Mr_Coldharbour

    You want iPhones that cost roughly $800 or ones that cost $1500? Take your pick.

    Also, there’s a grammatical error in the last sentence of the 6th paragraph. It reads “much more pricier” and should read “much more pricey” or “much pricier.”

  • malhal

    This is ridiclous, times have changed, no one in a westernised country wants to work on a production line and most of it is being automated now anyway, unfortunately Trump doesn’t understand that.

    • Flyboyron

      And you don’t understand that change (both in situations and in thinking) is inevitable. So do it!

  • HamptonWalley

    Looking forward to see on my Iphone made in USA :).

  • Mark S

    Why should the government subsidize a company with such large profit margins? No thanks. Bad enough it bailed out AIG et al.

  • Shawn Peticos

    anything that has tariffs or brought back to the USA will cost a hell of a lot more, no more cheap flat screens TV etc..