It wouldn’t take much for Apple Inc. to have U.S.-sold iPhones made outside China.
Foxconn Technology Group, the primary assembler of the devices, said Tuesday that it has enough capacity to make all iPhones bound for the U.S. outside of China if necessary. Apple hasn’t given the Taiwanese company such instructions, a senior executive of Foxconn’s listed flagship Hon Hai Precision Industry Co. said.
The question for Foxconn, Apple’s leadership, the U.S. administration and everyone else, though, is: What does “made” actually mean? This isn’t an esoteric question. As the technology and trade war escalates, billions of dollars hang on the answer…
Who gets the most credit should come down to who adds the most value, in my view… it’s clear that Apple really is the “maker” of the iPhone, even though it does very little manufacturing. Foxconn does the final assembly, yet its margins are one-tenth those of its client. Apple’s operating profit last year was $71 billion. Hon Hai, which gets half its sales from Apple, earned $4.5 billion.
MacDailyNews Take: Clearly, the bulk of the profits don’t lie in assembly.