“There’s several different ways that we can try to measure how much it would cost Apple to assemble the iPhone in the US,” Tim Worstall reports for Forbes. “You know, that reshoring of manufacturing that so many insist good and loyal American companies should do.”
“The most obvious answer is that it would simply be impossible: Foxconn, Pegatron and others employ several hundred thousand people across China to assemble Apple’s iKit and there’s just no possible method of getting that sort of scale in the US,” Worstall reports. “Not in any reasonable timescale at least.”
“A second approach could be to look simply at what the extra labour costs would be of assembling in the US,” Worstall reports. “The third way would be to look at the total extra costs Apple would have to pay and that gives us a very high figure of $4.2 billion [per year, $3.6 billion of which would be payable to Uncle Sam].”
Read more in the full article here.
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Tim Cook: ‘Made in the U.S.A.’ Mac will utilize ‘many’ US-made components – May 17, 2013
Robots made Apple switch to ‘Made in the U.S.A.’ Macs – December 11, 2012
Will Apple spark a U.S. manufacturing renaissance? – December 10, 2012
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Apple’s return of Mac production to U.S. next year to go well beyond mere assembly – December 7, 2012
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Apple CEO Tim Cook announces plans to manufacture Macs in USA; says TV is ‘area of intense interest’ inside Apple – December 6, 2012
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Apple and the American economy – January 24, 2012
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How Rick Santorum would lure Apple to move assembly from China to Charleston – January 21, 2012
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Robots. ‘Nuff said.
Great answer. Although I would imagine that in China, fully robotic manufacturing would be banned or heavily taxed, as it would put so many people out of the job.
In the US though, it will be the norm.
Look for a rumor in the future about Apple not ramping production and analysts freaking out. Surprise! We produced 10 million of these in the US without any leaks to the press.
Oh but the corporate tax from what I read is 35%. According to the Article Link.
“If they were to bring this into the US it would have to pay the US corporate income tax of 35% minus the 2% already paid: which is why they don’t do it.”
No corporation actually pays the full 35%. Neither would Apple.
Still its far too high. Tim Cook himself said that he’d favor a simpler system that had lower overall rates but no loopholes.
It is not just corporate tax, there are many other laws they would have to comply with. The “golden state”, California, has lost a huge number of companies who have moved out of state simply because they got tired of the goofy regulations they keep tripping over there. Other states who are much more business friendly have benefitted. It is not easy to move however. Without confidence they will be left alone, businesses just feel safer staying away. California is paying a heavy price for their anti-business stance. If I was Apple, I would stay away too.
Right. Business-friendly states like Texas, where such laws as safety regulations are routinely ignored resulting in catastrophe. Like the explosions that nearly wiped out that small town several weeks ago.
R2D2 -Agreed.
It has to be robots for two reasons. First, you can’t find 1/2 million Americans (the approximate number of Foxconn employees assembling iDevices) willing to work 50-hour weeks assembling iPhones. Second, $4.2 billion paid to 500,000 workers is $8400 per year for each . US workers don’t work for $4.20 an hour.
Right on with your math. I have to disagree about finding Americans to do the work.
Do you have any grown children, Thomas? In your wildest dreams can you see any of them working on an assembly line in clean-room garb for 8 to 10 hours per day assembling iPhone components? Have you seen that picture of the young Chinese girls sitting in a straight line as far as the eye can see mechanically laboring on either side of a conveyor belt with no iPods in their ears, no gum in their mouths, and little joy and creativity in their hearts? Are our children ready for that kind of labor, day after day, year after year, Thomas? I think not. Perhaps a hundred years ago, but not today.
Many are focusing on labor cost, making it out to be a “the Chinese work long hours for no money” thing.
However wage isn’t really the big stumbling block to american production, the government is. The quote:
“Apple would have to pay and that gives us a very high figure of $4.2 billion [per year, $3.6 billion of which would be payable to Uncle Sam”
… 3.6 of the 4.3 billion dollars directly to uncle sam speaks volumes about why it is increasingly difficult (robots or not) for large companies to keep production in the US.
Did Worstall really write “There’s several different ways..”? REALLY?
Who would want the iphone made in America? Americans can’t even make a car that lastsorr than a few years. How could they build a precision product like a iPhone?
Apple is an American company you numb nut.
Apple is an international company. It’s headquarters are in California, though.
Apple is an American company. It has international sales.
You’re an idiot. American cars can compete with the best in the world. It was more management greed and disregard that caused poor quality in car manufacturing. Cars in the 70’s were rust buckets due to cheap steal from China.
I’ll second that.
Anyhow want to go to a track see how you stand up to my CTS-V?
Bring it! haha
Cars in the 70’s were rust buckets? You’re way off bas, dude!! You’re the idiot!! Cars in the 80’s and 90’s were made of much more thinner metal than cars of the 70’s, which in turn rusted extremely quick.
way off “base” ….the lighter metal in the 80 and 90’s was supposedly for fuel efficiency….yeah, right! There’s your rest bucket. The 70’s was American steel!!
The 60s and early 70s were american steel. Most of the 70s was mexican steel from what I read.
The 1972 chevy truck I had was a far heavier and better built truck than the 1973 which was the first year of the redesigned truck GM would continue to make until the 1988 model year.
I had a string of FOUR P.O.S. American cars that were built in the ’80s when I first started driving and they left me with a bad taste for American cars. Once I got out of college in the ’90s I started buying Toyota and have never looked back. Some of the new Fords do look nice but I’m gun shy as hell about paying $30K+ for something that may not last much past the life of the loan.
Well I just traded in my Jeep Wrangler in my 2001 Jeep Wrangler a little over a year ago. It had 200,000 miles on it. Everything in it still worked. I love my 2012 Wrangler, I had it custom built out of the Toledo, Ohio plant. The quality is impeccable. There’s quite a bit more of innovation and quality that’s been added even since 2001. I think the American manufacturers have gotten it and have adjusted to the new world market. I’m on my third Jeep, I love them. I think it’s foolish to not have a second look with fresh eyes towards American built vehicles. Besides, it’s the patriotic thing to do.
I have been driving Jeeps since 1986 and using Apple products since 1979.
I bought the Call of Duty Black Ops Wrangler (my first Wrangler) and I expect it to last another 20 years.
I had a Jeep Comanche truck that had over 273,000 when I sold it, best truck I have ever had or driven.
Don’t let anyone say that the US can’t make durable goods anymore.
I remember a time when all Apple computers were made here.
Buy Jeeps then. They last on and on.
Rugged, reliable.
Lust like Apple products.
Always wanted a Jeep CJ when I was a kid but never ended up owning one. My next car will probably be a lightly used Land Cruiser, though.
You have likely still been buying American made cars then.
Toyota has been making the Corolla in the US since 1986, the Camry since 1988. They started truck production in the US back in 1991.
The issues with US manufacturers (in my opinion) had more to do with laziness and complacency from the top down. I had several US made vehicles in the 80s and 90s and agree they were crap. Every Chevy I had ended up with rattles and plastic parts falling off.
The bankruptcy of GM was the best thing for the company. Look at the vehicles they are producing now vs. back then. Its night and day.
Actually, none of my Toyotas were made in the U.S. Van, Previa, and now 2006 Scion xB were all made in Japan. And the Land Cruiser is still made in Japan. Sad to say but the Japanese-made Toyotas hold up better than the ones made by our workers. 🙁
I wonder why many like me will have never bought or will buy an US designed and built car? Their reputation has suffered and their lack of innovation has left them so far behind that they may never catch up.
Tesla in 10 years.
I own both a Toyota Prius and a 2013 Ford Fusion hybrid . I much prefer driving the Fusion and the fuel economies are very similar. And the Fusion pairs up nicely with my iPhone.
Even with the crappy M$ Sync or whatever it is? Or can you bypass that garbage?
Sync is the worst part of the Fusion. But I use it to the minimum. Either USB mode or bluetooth to connect with my iphone works pretty good most of the time..
I purposely avoided the sync navigation and do not use it for other car controls to avoid that nightmare.
Who was it that brought out the hybrid car first and who copied it ?
I said I drive both a Prius and a Fusion Hybrid. The Prius was there first, I give them credit, but the Fusion vastly improves the driving experience. The Prius interior is all plasticy, the Fusion is better appointed and the battery more powerful.
So you are essentially comparing the original iPhone to a new Galaxy S4.
My 2012 Volt is the first American car I’ve bought in decades. Great engineering, good build quality and a pleasure to drive.
How many years is it that it was released AFTER the Prius,?
The Jeep Wranglers last 20 years or more.
Not sure how old you are but US wasn’t importing steel from China in the 70’s. Nixon visited in 1972. Relations were normalized in 1978. My made in Germany 67 VW was a rust bucket.
No, it was the union thugs.
Sold last Ford Truck with 288k miles. Replaced a battery and a starter and it was the most reliable vehicle I ever owned. Sorry you’re stuck in the 80s.
The onslaught of Japanese imports has pushed the US to manufacture better quality cars. By most accounts (JD Powers, Consumer Reports), US quality lags slightly behind current Japanese makes, but is equivalent to Japanese cars of just a few years ago.
You might want to email Honda, Toyota, VW and Mitsubishi at the minimum and let them know. They make cars in the USA.
Chump Change for Apple.
There are other reasons for Apple to ‘repatriate’ their manufacturing here, not related to reasons of patriotism or altruism. Some of those reasons are also beyond the scope of this forum, and a bit complicated to discuss; but if Apple is paying attention to certain macro economic trends, and I hope they do, it would make good economic sense for Apple to move manufacturing back to the US, before “oil shortages” causes all hell breaks loose in China. And BTW with Robots: Not Gonna Happen in the Long Term.
Yes Chump Change for Apple.
How about you? Would you pay $1,000 for iPhone instead of $685 or so for iPhone. Must have a lot of loose change in your pocket.
More over the US labor market is not ready to take over such an effort of efficiency
I’ve seen all good people turn their heads each day so satisfied I’m on my waaay … 🙂
Prog rock references aside, you hit on themes why it will not happen. Union labor will greatly drive up the cost and efficiency for them is as elusive as a cat and water.
I’ll add a another reason: the political/tax element will likely increase, year over year, with no end in sight …
Make them in Charlottesville. I’ve heard there’s untapped talent there. .
LOL
Hallarious!
That would be chump change for Apple. After all they’re going to manufacture the new Mac Pro in the good old USA. they could at least move some of it back to the US. No countries workers are more productive or work harder than the American worker. We’re seeing more and more on-shoring because of things like transport costs, speed of delivery, productivity and states offering tax breaks and other incentives. We trusted Samsung with a bunch of manufacturing, and how much money was lost over American IP being ripped off. Plus the Chinese are demanding higher wages, shorter work weeks, paid vacations, etc. same thing in India. Let’s get Anerica working again, we deserve it.
The cost is incalculable.
Why?
1. Find US Labor & Cost
2. Facilities needed to both manufacture and house employees.
Seriously you would have to build a city to do this. It will be hundreds of billions.
Nonsense.
Okay, break down $4b+ into a feasible plan.
$50k/y for 80k employees is $4b all by itself. Then you have facilities and sister support industries. How many years to build up? So maybe not 100s billion. But to suggest $4-4.7 billion will do it means they have no clue what it takes.
Make the Factory 95% Robots 5% Humans. That sounds so creepy doesn’t it?
So, you want China to buy iPhones mace in America? 😉
Excellent. Less than 5% of cash on hand. What a great way to say THANKS! To the good ‘ol’ USA for making AAPL possible!
Please explain how the “USA” made Apple possible? Was Apple impossible without the “USA”?
Idealism is OK, just not realistic …
China graduates half a million engineers every year, and the US only 60,000.
Do you know what the US graduates a half million of each year?
Lawyers.
Apple doesn’t usually choose to manufacture very much themselves so the question should be how much more would an iPhone cost if Foxconn were to open a plant in the USA?
I’m sorry, Apple will never bring manufacturing of iPhones to the US.
As the article states that there are thousands of workers employed by Foxconn and Pegatron. These workers come from all over to work and make more money than where they originally come from.
At the same time, they sleep in dormitories and if they need to ramp up production, the employees are only yards away vs having employees be sleeping in their own homes (as they would in the US).
Factor in that the UNIONS would want to get involved and then you have a clusterfuck!
http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?pagewanted=all&_r=0
This is why!
I don’t believe the Forbes analysis. Taxes are on profits earned overseas, regardless of where the products are made. In fact, since costs would increase, Apple would see lower taxes.
WHY would Apple do that ? At four times the price, Apple will NEVER do this.
Other issue, is that the US does NOT have enough workers with the skillset to do these jobs… Too stupid….
Chrysler=Fiat
Fiat=Fix It Again Tony
nuff said
“There’s several…”
“There’re” as in “There are” – because plural. How do folks get jobs working in journalism without basic english skills?
Well. Who cares where they assemble it.
They could do it in the US, or Sweden for that matter. They would not have 1 million people on the pay roll, the factory would be highly automated in the western world so there would not any need for all those workers.