Pegatron CEO: If President Trump institutes ‘Made in America’, we can build iPhones in U.S. – as long as Apple absorbs the costs

“Pegatron Corp., one of the two Taiwanese companies that assemble iPhones and iPads for Apple Inc., said Tuesday that it would be willing to move that part of its operations to the United States once its client would absorb the additional costs,” Pan Chih-yi and Elizabeth Hsu report for Focus Taiwan.

“Pegatron CEO Liao Syh-jang was responding to questions raised at an investor conference about the company’s plans for its assembly plants in light of the comments by U.S. President Donald Trump that American brands should keep their production on home soil,” Chih-yi and Hsu report.

As long as there is demand, whether the clients are American or Chinese, Pegatron already has its production lines in place. If Trump institutes his Made in America proposal, it will be fine for Pegatron as long the client is willing to absorb the costs. — Pegatron CEO Liao Syh-jang

Read more in the full article here.

MacDailyNews Take: Last November, Dow Jones Newswires reported:

If Apple finds enough workers to assemble in the U.S., the cost of making an Apple iPhone 7 could increase $30 to $40, estimates Jason Dedrick, a professor at the School of Information Studies at Syracuse University. Since labor accounts for only a small part of an electronic device’s overall costs, most of these higher expenses would come from shipping parts to the U.S.

If the iPhone components were also made in the U.S., the device’s costs could climb up to $90, according to Mr. Dedrick’s research with UC Berkeley’s Greg Linden and UC Irvine’s Ken Kraemer. That means that, if Apple chose to pass along all these costs to consumers, the device’s retail price could climb about 14%.

Any additional costs to assemble in the U.S. would be spread out over the entire 100% of worldwide iPhone sales, as they are with the assembly of iPhones and iPads in other countries today.

Samsung plans major U.S. expansion, would shift manufacturing from Mexico – March 8, 2017
U.S. private sector job creation booms in President Trump’s first full month as employers add 298,000 jobs – March 8, 2017
Apple supplier Sharp may begin building $7 billion U.S. plant in within months as Japan PM meets President Trump – February 8, 2017
President-elect Trump says Tim Cook would ‘like to do something major’ regarding ‘Made in America’ iPhones – January 18, 2017
Foxconn-Sharp considering LCD plant in USA, plans in response to President-elect Trump’s ‘Make in America’ call – January 13, 2017
With President Trump soon to take office, Apple looks to boost its ‘Made in America’ credentials – January 10, 2017
Make America Insanely Great Again: Apple seeks to expand Made in USA manufacturing – January 9, 2017
Apple invests $1 billion in SoftBank’s massive tech fund; may help company get in President Trump’s good graces – January 4, 2017
Apple in talks to invest $1 billion in SoftBank tech fund – December 13, 2016
Apple supplier Foxconn plans U.S. expansion amid President-elect Trump’s Made in America push – December 7, 2016
Softbank to invest $50 billion in the U.S., create 50,000 new tech jobs after meeting with President-elect Trump – and Apple supplier Foxconn is in on the deal – December 6, 2016
President-elect Trump invites tech leaders to roundtable in Manhattan next week – December 6, 2016
President-elect Trump tells Apple CEO Tim Cook that he’d like to see Apple make products in the U.S. – November 23, 2016
President-elect Trump says Apple CEO Tim Cook called him after election victory – November 22, 2016
Apple could make iPhones in the U.S.A. under President Trump, sources say – November 17, 2016
Apple iPhone production in the U.S. is actually straightforward and not expensive – November 24, 2016
Japan’s Softbank just became one of Apple’s most important suppliers – July 18, 2016
How much would Donald Trump’s ‘Made in America’ Apple iPhone really cost? – June 13, 2016
How Apple can comply with Donald Trump’s ‘Made in America’ directive – January 21, 2016


        1. Off-topic. And tip of the iceberg. But there’s so much worse- namely, EVERYTHING WE ALREADY KNOW. Every tweet, word, diversion, intent and attempt. THE ENTIRE WORLD KNOWS THIS, THIS IS NOT A LIBERAL FANTASY.

          1. My feeling, 2005 is not worth my time. It didn’t work with the 1990s tax return. I want to see the last three years. I want to know we are dealing with an un-compromised citizen. There is a reason why banks want to look at your finances before they agree to loan you money to buy a house, not just the ability to pay. Also likewise you want to get top secret clearance, work for the feds? Send in your tax report, along with all your credit history. There are a lot of situations where you need to open up for review. I think being President is one of them. (Extreme Vetting) Yes there are a lot of open facts we know that most politicians wouldn’t survive the fallout. However we are not dealing with normal. We are on the other side of the mirror.

            1. Ah you are reading Breitbart or other alt-new/facts. This is such fringe InfoWars stuff, I can’t take it seriously.

              Open facts are what shows up Trumps twitter feed or pops out of Trumps mouth. Alt-facts is the act of trying to spin it; as if that’s not what he meant. Either he means it or he has turrets. I hardly think he has turrets.

            2. That 2005 IRS form, what two pages? – hardly would cover any kind of return Trump should have. I didn’t see the “presentation” and I am glad I didn’t. It was a ridiculous joke, according to reports. Though I would like a real return from the past three years – I don’t want to pry into his privacy – but I want a the minimum to have some team look at it and report that it checks out. A nonpartisan team to say, don’t worry it has no information that should alarm the public… I think we should put country before politics or personal niceties. We all make sacrifices, for the country.

      1. MSNBC reports that the big cheeto isn’t so great a businessman as he claims. He took deductions for $100 million in business losses in 2005. Wow, that’s inspirational. Using that nice loophole, his accountancy shenanigans would have allowed him to get off practically scott free, except for the AMT, an important threshhold that ensures that multimillionaires with teams of lawyer’s can’t evade paying taxes altogether. So guess which part of the tax code Trump has vowed to eliminate?

      2. hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha that was good.

      3. Next time they suggest you go to rehab, say “Yes, yes, yes.”

        Your comment is typically off-topic and obsessively delusional.

        Like an abused soul frantically defending your attackers to maintain your false grip on reality.

        Defending this regime to the Death will surely succeed in fulfilling that fantasy.

      1. The robots will be built by robots. They work 24/7/365, don’t ask for raises, don’t need healthcare of vacation days, and if you need them to learn a new skill, just upload some new software. Manufacturing jobs in the US will not be coming back anytime soon, and if they do, it will only be because things are so bad that Americans will be glad to work for Shenzhen wages.

  1. Thats lame. Anyone or any company can say “Sure, I can do anything as long as someone else pays for all of it”

    Real News is probably dead on, the human employees will just be programming and maintaining the robots. Don’t look for tens of thousands of assemble by hand jobs to suddenly be created.

    1. I think all Pegatron’s CEO is saying is that Apple should not expect to pay the same amount to assemble the iPhone in the U.S. as it costs right now in China and meant ‘absorb’ as what Apple would have to do if they intend to keep the price to the consumer the same.

      1. You’re both right. What can we do – the manual labor job is not going to be maintained in the USA for much longer. And really, that’s sad. Those jobs got lots of people a start of “working” responsibilities and an income. At some point the haves and have nots will be all that’s left.

  2. To say that Trump doesn’t understand economics and manufacturing would be putting it nicely. As someone who was a designer and manufacturer of electronics, I do understand this. Times have changed in the world. Around the beginning of the 20th century, we could do what the Chinese do now with workers moving into barracks and buying from company stores, but not anymore.

    Robots aren’t really the answer either, and even if it were, that would bring few Jobs back. It would even cost Jobs. The net would be around zero. And the value added to the phone by assembly has been estimated at around $9 per phone, meaning that it’s almost nothing. Therefore, almost nothing would be gained by bringing assembly to the USA.

    But we could have a major negative to that too. The Chinese people have been becoming ever more nationalistic. If we take assembly, and these hundreds of thousands of Jobs out of China, sales of these phones would drop much more. More would be lost than gained.

    1. Yes, but that loss would be to Apple (the corporation). POTUS and his administration would show significant PR gains from “bringing back jobs”.

      In the end, though, unless there are millions of jobs to come back, that PR gain can’t last all the way to the election. Regardless of what you tell voters (“millions of job are back!”), if they aren’t any better than they were when they voted for POTUS, they won’t vote for him again. Voters voted for change; if they didn’t get it, they will vote for another change.

        1. In every single election in recent history, the economy was the overriding factor. In the last one, it was even more so. White rural voters were unhappy about their economic prospects, so they voted for change. No doubt, a few other factors played a very minor part, (immigration, terrorism), but even those were strongly connected to the economy.

          There are people who believe that economy didn’t matter in the last election (after all, there were 75 months of job growth under Obama), but that job growth doesn’t make any difference for those whose manufacturing (or coal mining) jobs were lost (and never got back), and who hadn’t seen any improvement.

          It is always the economy.

          1. I’ll put it to you like this, for those people that voted for Trump, ask them how poorly he’d have to do in order to lose their vote. Heck, bring it closer to home and ask if they would vote for him in 4 years if they remained unemployed. They really don’t care about jobs or their personal economic well being as long as he holds that office. And that’s going to be hard for democrats to come up with an answer for. If people don’t so much want a “democrat” or a “republican” but want “Trump”, then anything not “Trump” loses from the start.

            1. I’m not sure where you get your information, but if you look at any material that came out, interviewing Trump voters, all they wanted was change because their manufacturing jobs were gone, and Trump was telling them what they wanted to hear. Nobody voted out of sheer admiration or love for Trump as a person. Every one of those interviewed claim that they wanted change, that he promised jobs back and that he essentially talked to them when nobody else seemed to.

              He may have some stored credit from all the good talk he gave, but ultimately, if their lives don’t get any better, they’ll vote him out as easily. This isn’t North Korea where people genuinely love (and fear) their leader; more than any nation in the world, America has the attitude of “What have you done for me lately?”, when it comes to political figures. Look at George Bush senior; in 1991, he could have sleepwalked through an election on popularity over the gulf war (kicking Saddam out of Kuwait); one year later, he lost it by a solid margin, as the US had entered a recession.

            2. Trump never offered peace or prosperity. He sure as hell isnt doing anything to spread them either. Slashing diplomatic departments, pissing off foreign leaders, erecting walls, jacking up protectionist tariffs, writing near fascist executive orders that don’t stand a chance in court, and overbuilding an already too expensive military will merely bankrupt the USA faster.

              Where are the job training programs, infrastructure improvements, and educational grants necessary to make ALL America truly great? So far its all been authoritarian bluff smoke and mirrors. Whining about wire taps without proof. Claiming his predecessor left him a mess when in fact the economy has spent 7 years ramping up steadily. Golfing at his resort when he should be refining the tax code.

            3. They also asked those voters… as the media reported some missteps of the campaign “What would it take for him to lose your vote?” There’s nothing Trump could do or say that would lose those voters. Anyone who’s counting on Trump being put out of office based on some perceived lack of performance is going to be disappointed in 4 years.

              This is a new world, and a lot of people still want to approach it the old way.

            4. Of course they said that now; he hasn’t expended any political credits he had built up with his rhetoric, and those votes have pent-up hope for change.

              Four years is a long time, and Trump is NOT like Kim Jong Un (as much as he would like to be).

              We shall see, but there is no reason to believe that the American voters have now suddenly developed this cult-like, unquestionable adoration for their leader.

            5. Yes, we’ll see. And I agree that it’s the people that actually go to the polls and vote AND that if only that subset that has a, as you say, cult-like following, are the only ones energized about voting (for Trump), then that’s where we’ll be in 4 years.

            6. Well, that was a pretty big subset, but still just a subset of all the actual voters.

              A significant component was the “f$¢k you!” votes — people who recognised trump full well for what he was — a disruptive, narcissistic, self-obsessed clown with no idea how to govern, but still voted for him because they were sick and tired with “the swamp”. Not to forget voters who were genuinely weighing between the two and decided to vote for him because he represented “change” and they liked one or more of his promises.

              The base will always be there, no matter what. However, to win elections, he (or anyone else) will need much more than just the base.

  3. Make no mistake: if this goes through in any meaningful way (i.e. if a factory starts churning out iPhones on the US soil), regardless of how many or how few and at what price (to consumers, or to US taxpayers), it will gain massive amount of mileage to the US administration and POTUS.

    However, when 2018 (and 2020) come around, what will matter is what always matters: economy. That little iPhone factory won’t mean much if those voters who voted for POTUS hadn’t seen any improvement in their own lives. And 3,000 Carrier jobs here, or 1,000 Intel jobs there, or 5,000 iPhone jobs elsewhere, wont make a meaningful dent in the rust belt, or the coal country.

    And let us not forget the new TrumpCare (or is it RyanCare?). CBO projects some 26 million potential voters will lose the coverage they currently have, if the plan goes as drafted.

    1. It’s all political posturing for those who are easily fooled. America may indeed start assembling iPhones on home soil and imports of iPhones will be reduced, but in order to do that, they will have to import large numbers of incredibly expensive robots. The most widely used robots in industry are built in China, Germany and Switzerland.

      There won’t be many extra jobs created and instead of importing iPhones, America will be importing robots to build iPhones. Where is there a meaningful gain?

      1. If the robots have to be imported maybe it will make it cost effective to build those robots domestically instead which would lead to not just manufacturing jobs but also give more work to foundries to provide the metal.

        1. You make it sound like all you need to do is to bolt some metal together and connect it up to a PC. The reality of designing and building robotic assembly machines is quite a daunting challenge if you’re planning on using them for rapidly and reliably assembling vast numbers of precision items like iPhones.

          It’s not something that American politicians are likely to support either. Can you imagine any politician campaigning on a policy to build millions of American robots? The first question that would need to be answered is what are you planning on doing with them? If they boasted that they would be used to replace American workers, then you can imagine how the electorate would respond.

          Between me posting my first reply and making this one, I have come across a story by The Verge, which is very relevant to this discussion.

          1. Perhaps I may have simplified too much. If robots are expensive to import and building domestically becomes a favorable option, at the ‘base’ level foundries would be needed to provide metal for other companies to shape into metal components (I’m thinking Detroit here). This ‘chain’ will also need companies to design the robots, develop software, include companies that develop servos and wiring and the computerized HW specific to controlling the robot’s movements, all of which already exist in the U.S. but are IMO underutilized due to lack of domestic demand.

            I agree that robotic manufacturing and assembly would possibly take jobs away from certain segments, but like the industrial revolution other jobs would take their place by necessity. Among those jobs would be those that will require producing those robots or provide the resources required to produce those robots. If America becomes truly focused and becomes a net exporter of robotic tech we would be on par with the other countries that have advanced in that area.

            1. Japan, Korea, China, Germany and Switzerland already use robots to make robots and have been doing so for many years. It’s unlikely that manufacturing robots would create many new jobs in the USA, while the deployment of those robots in domestic industry would certainly eliminate huge numbers of jobs ( after all, that’s exactly what they’re designed to do ). Try putting on your politician’s baseball cap and explain to us how you would sell that idea to your voters.

              With regards to exporting them. Why would other countries choose to import American robots when proven ones are readily available elsewhere? Furthermore America is entering an era where trade protection is likely to happen, but it’s important to remember that such actions are a two-way street. If you put obstacles in the way of importing foreign goods, you’re going to find it more difficult to export your own goods because reciprocity will come into play.

            2. I am proposing that the U.S. get its own robot ball rolling. If other countries are ahead that should goad us to create something better that they would want. Just because they already are ahead now doesn’t mean we should give up. Protectionist policies may make things more difficult for trade but if the tech is better why would those barriers remain barriers to those that truly desire to purchase that tech.

  4. Great news, now we can expect products “Made on Planet Earth.” to come from Apple, cause really they don’t want to absorb the cost, they want to empower humanity, in contrast to their home nation.

    Way to go Apple, integrating the planet and moving humanity forward, well at least the ones brave enough to move forward, the gutless cowards will probably end up building a wall around themselves.

  5. Outsourcing all started with the Y2K big (that wasn’t). And then every major company saw the financial benefits of outsourcing repetitive tasks to low paying workers. This will never be reversed. If not China or India or Bangladesh or Mexico, pick the new outsourcing capital of the world. But not America. Who do you know willing to receive $0.25 per hour to build the most powerful and advanced devices? How’s that going to improve the economy? What’s apple to do if they have to absorb all the cost of building iPhones in America? First, makes sense to simply buy Pegatron. Then, import lots of low income workers to assemble the phones. But they don’t have to go that far. Just keep things where they are otherwise you’d have to double the price of an iPhone. It doesn’t matter what the cost to assemble is, it’s the FULL cost that will be passed on to consumers plus the regular 40% margin. Still want it done in America?

    I’d rather follow in apples footsteps and create a solution to people’s problems and sell the solution to them for as much as possible. That’s how you fix an economic problems–by creating solutions to problems that are important to people. Just like apple, Google, Microsoft, Facebook, Amazon, etc have done. Instead of forcing them to resort to slow growth, compete with them. Their prices will go down when competition is healthy. No matter where the products are made.

    Come on people, this is what makes America great (we’ve always been great, by the way). Immigrants who create solutions.

    1. OH, it most certainly was a bug, don’t count out American’s ability to rise to the challenge and resolve issues BEFORE they happen. The doomsday scenarios were the way the rank and file people got the executives to get off their asses, listen, and pay for folks to do the right thing 🙂

    2. The Y2K (Year 2000) Panic was not caused by a bug or by planned obsolescence. Digital storage used to be expensive, so the century in dates (always 1900) was left off to save a few bytes. Even more extreme, sometimes the day or even month digits of a date were sacrificed for economical storage. (Today that is unthinkable for the precision algorithms employed by insurance actuaries and the Social Security System, to mention only two.) The “panic” portion of the Y2K meme was due to newspapers’ overwrought dramatics about missile silos or manufacturing processes malfunctioning because of date-stamps, possibly leading to a breakdown of civilization itself. In truth, companies and governments were not panicking; they duly set corrective tasks for their programmers, which all were carried out in plenty of time to avoid Armageddon. But — rather than congratulate captains of industry and government leadership for this reprieve from an imagined Doomsday, the new meme parroted by newspapers became that the whole thing had been a tempest in a teapot, something that satiric columnists could safely ridicule.

      There does exist a spot for journalism in the pantheon of heroes; but more often, as in cases like this, the press is an ass.

  6. You can build anything anywhere if you are willing to pay for it. You can build a factory in the artic or the moon.

    Also what are the tax penalties for importing Samsung etc phones?

    Jobs used to make macs and Next machines in USA until cheap windows imports crushed the market. Jobs then hired Cook from ibm Compaq to establish the overseas supply chain.

      1. sigh

        botty, why pick fights with me when I’ve said over and over again I’m not political ….

        as for this thread: everything I’ve said is factually true. Jobs hired TC etc. and for 6-9 (I lost count) Apple won the industry’s supply chain award under TC beating Amazon, Walmart etc. (note: I’ve criticized TC for his Mac neglect but also praised him for his iPhone work etc).

        if you have actually anything of value to add to MY THREAD do so , otherwise you are flapping your gums…

        1. botty, any post you seem to think is a criticism of Trump you want to troll.
          (and you keep going at my factual posts without anything ‘factual’ to add or rebut).

          dude WORSHIPPING ANY POLITICIAN is dumb foolishness.

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