Your Apple iPhone is already Made in America

Tim Culpan for Bloomberg:

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.

18 Comments

    1. I have read that Foxconn pulls together over 200,000 people to assemble iPhones at times. There is no one place in the U.S. where you could do that, certainly not in Wisconsin. The available workforce just doesn’t exist.

      There were over 100,000 un-filled positions in Minnesota last year, and Wisconsin’s population is even smaller than Minnesota’s.

      Even for Foxconn to do this, they recruit from rural areas of China, and then house and feed their employees in a virtual city at the factory. I find it unlikely that such a thing would work in the U.S.

      1. That is a great observation Dude. People who clamor for moving Apple’s manufacturing to the US don’t get this and the many other obstacles to making the move such as all the specialized component suppliers, many of which would be unable to make the move to the US.

        There are a couple of things you assume incorrectly about the above article, though. 1) Foxcon says it has the capacity to manufacture the iPhones outside of China…not specifically to manufacture here in the US…just “outside of China”. 2) even if he means in the US, they would not require the number of workers you state because they are talking about just the subset of phones that are sold to US customers. That subset is way less than half the total phones for the world market. Plus there are more and more assembly jobs that are handled robotically now.

        1. “Even if he means in the US”
          He doesn’t. 🙂 Foxconn has zero manufacturing footprint in the US. He very likely meant India or Vietnam. No two ways about it, manufacturing will be owned by China no matter where Foxconn goes

  1. Migrants from Guatemala and El Salvador stopped at the US/Mexico border would love to be employed in a FoxCon plant in N. Mexico while they wait out for Trump’s asylum process.

  2. That is a great observation Dude. People who clamor for moving Apple’s manufacturing to the US don’t get this and the many other obstacles to making the move such as all the specialized component suppliers, many of which would be unable to make the move to the US.

    There are a couple of things you assume incorrectly about the above article, though. 1) Foxcon says it has the capacity to manufacture the iPhones outside of China…not specifically to manufacture here in the US…just “outside of China”. 2) even if he means in the US, they would not require the number of workers you state because they are talking about just the subset of phones that are sold to US customers. That subset is way less than half the total phones for the world market. Plus there are more and more assembly jobs that are handled robotically now.

  3. Giulio Guidetti, the owner of the Ciocc bicycle co. From whom I purchased a handsome Ciocc revealed to me that he imports the carbon tubes that he gets made in Taiwan. He then assembles, paints, and adheres the logos to the frame. He adds other parts manufactured by others: The Deda stem, the handlebar, wheels and tires, and the Campagnolo drivetrain. So even though most of the components are manufactured outside of Italy, he is allowed to say that the bike is manufactured in Italy. Of course, this gives it prestige and a higher price. The bike is so new that I have not needed to replace the Italian air in the tires yet.

  4. Every Apple device is made here in America (complete), before it is assembled by Foxconn in China or anywhere else in the world, so Apple can made their devices anywhere.

    And 100,000 workers at 60,000 dollars per year (average) is only 6 billion dollars, Apple can make those devices anywhere in the world…..

    1. You… DO realize that Apple doesn’t make anything anywhere, right? Apple doesn’t have the land the workers, the raw. materials…. nothing. “Apple can make those devices anywhere in the world” is a lie. Apple can make those devices wherever Foxconn has set up shop.

      Old people think manufacturing is just as easy as spending (people x wage).

      1. 60,000 per year US/Europe x 234,000 workers = 14,040,000,000 billion dollars, 6,666 China per year x 234,000 workers = 1,559,844,000 billion dollars, land cost, material, and energy cost across the world is the same for a super corporation, Apple forgoing just 20 billion dollars in buybacks is able to do it (the cost difference is 12,480,156,000 billion dollars per year)….

  5. While some production may shift to India in order to avoid Trump Tariffs the China production can remain for the rest of the world.

    The big issue for the future will be robots to assemble the iPhone. There are already robots to take apart iPhones so there will be opportunities in the future. At that point it won’t matter where the robots are operating.

  6. I would love to see “Made in America” on a new iPhone one of these days. I’m not the biggest supporter of Trump, but if he somehow makes this a reality, I might give him a little more respect.

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