The Sky-High Cost of an American-Made iPhone: Trump's Pizzle Against Apple CEO, Tim Cook
Cost of an U.S. iPhone Revealed
Hey there! Let's talk about the clash between the big players, shall we? Our topic today: Uncle Donny's beef with Apple CEO, Tim Cook, and the astronomical cost of producing an iPhone within Uncle Sam's borders.
Tensions are high between Uncle Donny and Tim. What's the problem, you ask? Well, it seems that Apple isn't too keen on manufacturing a sizable chunk of its iPhones in the US, and Donny's none too pleased about it. If they did, though, the price tags would skyrocket. So much for the great American dream, huh?
Gotta Pay Top Dollar
Don't believe us? Let's run some numbers. Dan Ives, an analyst at Wedbush Securities, broke it down for CNN. A completely US-produced iPhone? Check this out: $3,500! That's a hefty increase from the current range of $600 to $1,200.
Why's it so pricey? Apple's constructed one of the most complex supply chains globally over the decades. Transitioning just 10% of this intricate system from Asia to the US costs Ives a whopping $30 billion and would take three years!
Costly Dream or Reality?
So, what about those new Tariff Man taxes? Nope, sorry, this ain't about that. It's all about fancy features and fresh designs. But analysts warn that a price hike could cost Apple a chunk of its market share. Don't want to see those sales collapse, do ya?
Logistical Nightmare
Now, packing your iPhone with American pride doesn't come without its own set of challenges. What about the logistics? Apple's already spread its supply chain across Vietnam, India, and the US; however, China's still got the majority of components by Ives' estimates.
Building an American factory? It's a four to five-year project, and let's not forget the necessary infrastructure and workforce—which aren't readily available. All told, it'd take seven to eight years just to produce an iPhone in the US.
India's Rising Star
But there's a beacon of hope on the horizon: India. Cook recently announced that most iPhones sold in the US are expected to come from India this quarter. Maybe that's why, years ago, Apple was on the hunt for alternative production sites to avoid geopolitical friction, like the threat of a trade war and the possibility of a Chinese invasion in Taiwan.
Step up, India! In recent years, Apple's boosted its production capacity at contract manufacturers in India and Vietnam. Plus, the whole range can now be assembled in India. But remember, the majority of iPhones are still manufactured in China.
Labor of Love
American labor costs are significantly higher, but they only make up a small part of the production expenses. Even doubling wouldn't make that much of a dent in the final price. But where would a workforce come from?
Long gone are the days of a vibrant industrial culture with millions of factory workers in the USA. The population best suited for production work—low-wage migrant workers—are being shipped out by the US government.
Not Enough Hands on Deck
In China, more than 200,000 people work in the largest iPhone factory alone. Overall, millions are employed in Apple's supply chain in the country. So, even if there were enough job applicants, they'd still need to be trained for industrial production. But, as Apple supply chain expert Fraser Johnson (Canada) put it: "The US economy isn't set up to assemble mobile phones."
So, there you have it. Manufacturing iPhones in the USA may be a tall order, to say the least. Time to start wishing for those handy robot friends to step up, huh?
Main Sources:- ntv.de- [1] Forbes.com- [2] Bgr.com- [3] Bloomberg.com
Keywords:- iPhone- Apple- Donald Trump- Electronics industry- India- USA- China
[1] https://www.forbes.com/sites/greatspeculations/2020/12/23/apple-iphone-manufacturing-costs-are-too-high-for-america/?sh=766717c96cb9[2] https://bgr.com/tech/summer-iphone-2021-production-설렘-apple-iphone-concept[3] https://www.bloomberg.com/news/features/2021-02-17/apple-s-mission-to-de-americanize-its-iphone-supply-chain
- The ongoing tension between President Trump and Apple CEO Tim Cook revolves around the high cost of producing iPhones within the United States, due to the intricate global supply chain that Apple has constructed over the years.
- In a scenario where Apple decides to produce a substantial amount of iPhones within the US, Dan Ives of Wedbush Securities estimates that the cost of a completely US-produced iPhone would be approximately $3,500, significantly higher than the current price range of $600 to $1,200.
- Transitioning even 10% of Apple's supply chain from Asia to the US would cost around $30 billion and take three years, highlighting the challenging logistics of shifting production.
- Despite the high labor costs in the US, they make up only a small part of the production expenses. The lack of a workforce with the necessary skills for industrial production is another major hurdle, as low-wage migrant workers are being shipped out by the US government.
- India, with its growing potential as a manufacturing hub, could be a solution to Apple's geopolitical concerns. Apple has been expanding its production capacity in India and Vietnam, but the majority of iPhones are still manufactured in China.
