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Apple Explores Making iPhones in the US, Finds 'the Cost Will More Than Double': Nikkei (nikkei.com)

Apple is exploring the idea of making iPhones in the United States. But the company has realized that it will cost more than double to make the shiny new gadgets at home, according to a report on Japan-based outlet Nikkei. From the report:Key Apple assembler Hon Hai Precision Industry, also known as Foxconn Technology Group, has been studying the possibility of moving iPhone production to the U.S., sources told the Nikkei Asian Review. "Apple asked both Foxconn and Pegatron, the two iPhone assemblers, in June to look into making iPhones in the U.S.," a source said. "Foxconn complied, while Pegatron declined to formulate such a plan due to cost concerns." Foxconn, based in the gritty, industrial Tucheng district in suburban Taipei, and its smaller Taiwanese rival churn out more than 200 million iPhones annually from their massive Chinese campuses. Another source said that while Foxconn had been working on the request from Apple Inc., its biggest customer that accounts for more than 50% of its sales, Chairman Terry Gou had been less enthusiastic due to an inevitable rise in production costs. "Making iPhones in the U.S. means the cost will more than double," the source said.

472 comments

  1. So what? by Anonymous Coward · · Score: 0

    Crank up the marketing and the fan-boys will still buy 'em.

    1. Re:So what? by Anonymous Coward · · Score: 0

      gritty, industrial Tucheng district

      Gritty and industrial? WTF? Sounds like the author of this piece hasn't even been there. Tucheng is a pretty nice area in reality.

    2. Re:So what? by Joce640k · · Score: 2, Interesting

      This is just starting some per-emptive whining because Trump has mentioned that he's going to make Apple manufacture in the USA.

      I'm not sure how he thinks he can legally do that. A better solution would to to make Apple pay its taxes.

      --
      No sig today...
    3. Re:So what? by Curunir_wolf · · Score: 4, Insightful

      This is just starting some per-emptive whining because Trump has mentioned that he's going to make Apple manufacture in the USA.

      I'm not sure how he thinks he can legally do that. A better solution would to to make Apple pay its taxes.

      Right. And that could come in the form of a special tariff. I'm told the cost to make an iPhone is around $178. So add a $178 tariff to each one, and it makes the choice very easy for Apple. They can either start making them in the US, providing jobs to Americans that can then more easily afford an iPhone, or keep making them in China where pollution controls are very low and worker protections are even lower.

      --
      "Somebody has to do something. It's just incredibly pathetic it has to be us."
      --- Jerry Garcia
    4. Re:So what? by ttpilot · · Score: 1

      As I recall, Trump intends to cut corporate taxes

    5. Re:So what? by JrOldPhart · · Score: 1

      No company pays taxes: taxes are part of the overhead which is included in the cost of the product. You pay their taxes.

      --
      Nothing is foolproof, fools are too ingenious. - Murphy
    6. Re: So what? by Anonymous Coward · · Score: 0

      I don't even live in the US, but to me it sounds like a terrific idea to manufacture high tech products in the US. I would personally be ready to pay 2x more for such products.

    7. Re:So what? by laird · · Score: 5, Informative

      Apple tried to manufacture the iPhone in the US initially. The reason they didn't wasn't wages - in highly automated mass production, wages are a tiny percentage of cost of goods. The "deal breaker" was that the US didn't have enough industrial engineers to manage the production lines. Apple would have had to hire 100% of the new graduates from all US universities for 3 years to have enough engineering management to run the lines. The secondary issue is supply lines. All of the suppliers manufacture in or near Foxconn in China, so they can iterate on designs in hours, rather than weeks (shipping). So, to be in market years earlier, and with maximum agility, Apple had to be in China. Manufacturing on a large scale in the US was killed long before the iPhone launched.

    8. Re:So what? by Anonymous Coward · · Score: 1

      And I don't pay taxes either: my taxes are overhead included in the cost of my salary, right? I think if you follow that argument further you will discover that, in fact, no one pays taxes -- or anything else, for that matter.

    9. Re:So what? by RandomSurfer314 · · Score: 1

      That's a brilliant idea, because that would also have the added benefit that clunky German Siemens phones would suddenly become attractive again.

    10. Re:So what? by sexconker · · Score: 1

      I'm not sure how he thinks he can legally do that.

      Tariffs. Import restrictions. Like every other country not in an economic death spiral has.

    11. Re:So what? by tripleevenfall · · Score: 1

      Don't see any problem with singling a certain company or product out for tax persecution, eh?

      Wait until it's the company you work for, or your political enemies are in office

    12. Re:So what? by K.+S.+Kyosuke · · Score: 2

      And then, the Laffer curve will bite him in the ass?

      --
      Ezekiel 23:20
    13. Re:So what? by Joe_Dragon · · Score: 5, Insightful

      no they where not able to find industrial engineers willing to work 60-80 hours a week for $32K a year.

    14. Re: So what? by thundercattt · · Score: 1

      Not like the Fanboys pay for them anyway. Free upgrades for everyone!

    15. Re:So what? by MickyTheIdiot · · Score: 3, Insightful

      When so many corporations get around their taxes completely, what can cuts do.

      We keep doing the same bullshit over and over and over. Cutting corporate taxes helps the corporate class and does little for anyone else.

    16. Re:So what? by MickyTheIdiot · · Score: 1

      The same old shit from corporate assholes. This isn't how things work and you know it.

    17. Re:So what? by speedplane · · Score: 1

      ... A better solution would to to make Apple pay its taxes.

      Right. And that could come in the form of a special tariff.

      The problem with imposing tariffs is that it can easily start a trade war raising the prices of all sorts of goods, not just Apple's. Getting them to pay their taxes doesn't bring that risk.

      --
      Fast Federal Court and I.T.C. updates
    18. Re:So what? by MickyTheIdiot · · Score: 1

      Yeah.. right now all worker shortages are in this category.

    19. Re:So what? by Anonymous Coward · · Score: 0

      no they where not able to find industrial engineers willing to work 60-80 hours a week for $32K a year.

      yes, and your point is?....

    20. Re:So what? by starless · · Score: 2

      Right. And that could come in the form of a special tariff. I'm told the cost to make an iPhone is around $178. So add a $178 tariff to each one, and it makes the choice very easy for Apple. They can either start making them in the US, providing jobs to Americans

      And the Japanese government should charge Toyota several thousand dollars for each car that Toyota makes in the US or other foreign (non-Japan) countries rather than making them in Japan, providing jobs to Japanese workers?

    21. Re:So what? by Scragglykat · · Score: 2

      Can people making the US minimum wage and trying to provide for themselves really afford to buy more iPhones?

    22. Re: So what? by MickyTheIdiot · · Score: 1

      I am confused why it would COST 2x to the consumer. It's two times the cost of manufacture, but as I have read the manufacturing cost is actually quite low and most of the cost of an iPhone has to do with the premium paid for the Apple name.

      2x a small number is often still a small number.

    23. Re:So what? by Rob+Riggs · · Score: 1

      And then, the Laffer curve will bite him in the ass?

      They do not teach the Laffer curve in the Republican school of Voodoo Economics.

      --
      the growth in cynicism and rebellion has not been without cause
    24. Re:So what? by hey! · · Score: 1

      Well, taking a Google Streetview stroll around, "gritty, industrial" doesn't seem too far out of place, but that's not necessarily bad; it's a matter of what you like. It looks a bit like how I imagine 1920s Manhattan to have been, with high density mid-rise residential housing cheek-by jowl with commercial and industrial facilities. Only with densely forested mountains a few miles away.

      It's not the way Americans organize things, but it has its attractions. I bet a lot of people walk to work and buy stuff for their evening supper on the way home.

      --
      Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
    25. Re:So what? by Anonymous Coward · · Score: 0

      So they hired graduates from the US in China instead?

      I went to a State School in the US and I'd say 50% of the undergraduate engineering students were Asian (either Chinese or Indian).

      The point is they weren't moving overseas to tap some vast level of experience. They went there because they can hire a graduate for pennies on the dollar. In some cases they will even get a US trained engineer who couldn't get a job in the US after graduation.

      The company I worked for after college routinely sent people to China to train them on manufacturing techniques all the way into the early 2000s (I think). Specialized manufacturing is hard, and Chinese Startups paid huge sums of money to American experts to train them. They then paid their own workers peanuts to continue doing the work. Why pay 10 highly skilled and experienced engineers when you could pay one, and then shove a few hundred dirt cheap engineers through the revolving door. Also you can ignore all those pesky health and safety rules.

    26. Re:So what? by Joce640k · · Score: 3, Insightful

      The USA is producing college graduates with massive debt who can't afford to take normal jobs.

      --
      No sig today...
    27. Re:So what? by aicrules · · Score: 1

      He's not lowering the tax to zero. So what's your point?

    28. Re:So what? by Waffle+Iron · · Score: 1

      Why not?

      The US has been doing that for light trucks for over 50 years.

    29. Re: So what? by saloomy · · Score: 1, Troll

      You don't work in a corporation? Most people do. And spending less money on taxes gives them more money to spend on payroll, reinvestment, or dividends. The first two benefit you, the third one can benefit you if you buy stock in the company you work for. I think all employees that can, should.

    30. Re:So what? by oh_my_080980980 · · Score: 2, Informative

      No Apple does not pay their taxes. Apple is hold revenue off their books in order to not pay taxes. Apple also has elaborate shell business that hide their revenues. http://prospect.org/article/pr...

    31. Re:So what? by khallow · · Score: 0

      Why should we want government taxation maximized? The point of the Laffer curve is that setting taxes arbitrarily high is harmful to government revenue (which is a thing tax increase proponents tend to want to increase). That no longer holds, if you don't see optimizing tax revenue as more important than the economic well-being of society or human freedom.

    32. Re:So what? by footNipple · · Score: 0, Flamebait

      If it were to pass, and I doubt it will, a 15% US corporate income tax rate would likely cause a sharp rise in then a consistent level of corporate tax revenue that this nation has not experienced before.

      In very simple terms: corporations now do everything to avoid taxes and with a 15% rate, many will start to actually keep cash in saving to purchase capital goods and fund future expansion.

      Banks won't like it though because of less demand for their fiat dollars. And we know what kind of power the bank lobbies have.

    33. Re:So what? by KingMotley · · Score: 1

      Apparently, yes. There is a large group of people that aren't even making minimum wage (or any wage) that have iPhones.

    34. Re:So what? by skids · · Score: 4, Insightful

      They do not teach the Laffer curve in the Republican school of Voodoo Economics.

      Oh yes, they quite definitely do... they just lie about which side of it (or related macroeconomic curves) we are on.

    35. Re:So what? by Curunir_wolf · · Score: 3, Insightful

      Right. And that could come in the form of a special tariff. I'm told the cost to make an iPhone is around $178. So add a $178 tariff to each one, and it makes the choice very easy for Apple. They can either start making them in the US, providing jobs to Americans

      And the Japanese government should charge Toyota several thousand dollars for each car that Toyota makes in the US or other foreign (non-Japan) countries rather than making them in Japan, providing jobs to Japanese workers?

      Japan doesn't import US-made cars to Japan. They make them in the US to ... get around import restrictions! TADA!

      --
      "Somebody has to do something. It's just incredibly pathetic it has to be us."
      --- Jerry Garcia
    36. Re:So what? by AvitarX · · Score: 1

      I don't buy that argument across the board.

      It'd be true in a truly open and free market, but government granted monopolies (IP protections) allow certain things to be priced not in a way that just surpasses break even enough to be worth it, but instead at the highest price people are willing to pay.

      Yes, at the supermarket, a corporate tax is passed along, but not for something like a drug company.

      --
      Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
    37. Re:So what? by tbannist · · Score: 4, Insightful

      That when someone says it's not wages, it's the lack of available experienced workers, they are actually saying it's wages. The proper response to not being able to find enough people to do a job is to offer more money, not complain that there's no one qualified because not enough people are willing to do the job at the price you're offering.

      There are very few occupations where there can be a legitimate lack of talent/experience for the job. Running an assembly line isn't one of them.

      --
      Fanatically anti-fanatical
    38. Re:So what? by Anonymous Coward · · Score: 0

      Yes.

    39. Re:So what? by Curunir_wolf · · Score: 1

      Don't see any problem with singling a certain company or product out for tax persecution, eh?

      Wait until it's the company you work for, or your political enemies are in office

      I actually do see a problem with it. What I certainly do not have a problem with, however, is targeting companies (yes, or products) based on specific behavior for tax penalties and/or benefits. It's been done for a long time, and even Obama did it, sometimes even without congressional action at all.

      --
      "Somebody has to do something. It's just incredibly pathetic it has to be us."
      --- Jerry Garcia
    40. Re:So what? by e432776 · · Score: 1

      Possibly. Though I think I read that there are more iPhones sold in China than US right now. Oh yes, here is a source. Quoting:

      The most important finding, though, was that the data suggests there are now more than 131 million iPhones in-use in China at the end of 2015, making it a larger market for Apple than the U.S., which is estimated to have 110 million active iPhone users, according to data released earlier this year by Consumer Intelligence Research Partners.

      It might make more sense for Apple to keep making and selling iPhones in China than move the whole show to the US.

    41. Re: So what? by Anonymous Coward · · Score: 0

      spending less money on taxes gives them more money to spend on executive bonuses, golden parachutes, and stock options given to executives while reducing the work force and outsourcing to temp agencies that flood the market with cheap H1-B labor.

      FTFY

    42. Re:So what? by Anonymous Coward · · Score: 0

      You are so full of Bullshit. My son is a Production Engineer for a Marine ROV company right now.

      There are many Americans looking for an Industrial Engineer postion.

      The reason is Apple would rather pay 500 12 year old kids $1.25/hr (no health benefits) to build the iphone
        Foxconn has been embedding code in products for a while. The devices call home and report data back.

      it's great that some countries are wising up. Maybe this will pressure Apple to manufacture the device in the USA. Apple set themselves up for Asia to produce counterfeit Apple products.

    43. Re: So what? by hambone142 · · Score: 1

      Twice the manufacturing cost doesn't mean the phone cost will double. The majority of the phone cost is material cost. That would be pretty close to the same.

    44. Re:So what? by ShanghaiBill · · Score: 3, Insightful

      When so many corporations get around their taxes completely, what can cuts do.

      A lot. One of the reasons that corporate tax payments are so low is because the rates are so high, so corporations have a big incentive to lobby for loopholes, and pay accountants to exploit them. If they pay an accountant $80k, and he finds $81k of tax reduction, then it is worth it to the corporation to employ that accountant, but it is an $80k dead loss to society.

      Taxes should be simple and fair, and they should incentivize good behavior. Our current corporate taxes do none of that. They are immensely complicated, very unfair (two near identical companies can have dramatically different tax rates), and the incentivize a lot of harmful behavior, like shipping jobs and capital overseas.

      We need to cut the rates, eliminate the loopholes, and get rid of the idiotic extraterritorial taxation that is done by no other country on the planet.

      Disclaimer: My wife and I run a software business that is incorporated. I spend a lot of time reading up on tax laws. That is time that I could otherwise spend on productive activities. But it is worth it, because we pay near zero income taxes. Oh, and here is how many Americans we employ: 0. Our sysadmin is in Shanghai, our graphic artist is in Karachi, etc. You can thank your government for that.

    45. Re:So what? by coinreturn · · Score: 2

      This is just starting some per-emptive whining because Trump has mentioned that he's going to make Apple manufacture in the USA.

      I'm not sure how he thinks he can legally do that. A better solution would to to make Apple pay its taxes.

      Except that Trump wants to give ex-patriated money a "tax holiday" to bring it home. Yeah, that'll help the deficit the Republicans cry about when Democrats are in office, but insist doesn't matter when Republicans are in office.

    46. Re:So what? by ShanghaiBill · · Score: 3, Informative

      No Apple does not pay their taxes.

      They pay what they are legally required to pay. How much extra money have you voluntarily donated to the IRS? Nothing? Then why should Apple?

      Apple is hold revenue off their books in order to not pay taxes.

      No, they hold it overseas, which is not "off the books". If you think it is absurd for the US government to incentivize companies to invest outside America, then you should complain about it to congress, not to Apple.

    47. Re:So what? by Anonymous Coward · · Score: 0

      The iPhones would be built on the same lines as Cisco routers and switches by companies such as Jabil and Flextronics. Flextronics has multiple sites in the US. In fact, the Flextronics Austin facility is maybe 2 miles away from Apple Austin campus.

    48. Re: So what? by Anonymous Coward · · Score: 0

      Vatican is protected by Swiss Guard.

    49. Re:So what? by K.+S.+Kyosuke · · Score: 1

      Didn't Trump promise rebuilding the infrastructure or something? (Not US-based so I don't know what overblown promises were made this time.)

      --
      Ezekiel 23:20
    50. Re: So what? by Anonymous Coward · · Score: 0

      You forgot lobbying

    51. Re:So what? by Tharkkun · · Score: 1

      Don't see any problem with singling a certain company or product out for tax persecution, eh?

      Wait until it's the company you work for, or your political enemies are in office

      It targets advantage of any and every company that takes advantage of China's slave labor and tax evasion tactics. Apple still makes billions in profit each year. Slashing that a bit to become legit will only effect their stock price. It won't in any way hinder their development.

    52. Re:So what? by Tharkkun · · Score: 1

      Apple tried to manufacture the iPhone in the US initially. The reason they didn't wasn't wages - in highly automated mass production, wages are a tiny percentage of cost of goods. The "deal breaker" was that the US didn't have enough industrial engineers to manage the production lines. Apple would have had to hire 100% of the new graduates from all US universities for 3 years to have enough engineering management to run the lines. The secondary issue is supply lines. All of the suppliers manufacture in or near Foxconn in China, so they can iterate on designs in hours, rather than weeks (shipping). So, to be in market years earlier, and with maximum agility, Apple had to be in China. Manufacturing on a large scale in the US was killed long before the iPhone launched.

      Bullshit. There's people at Foxconn that come right out of high school to work in those factories. The excuse about highly technical workers is a sham. Yes in some parts they need skilled workers but the brunt of the work is done through slave labor.

    53. Re:So what? by Tharkkun · · Score: 1

      no they where not able to find industrial engineers willing to work 60-80 hours a week for $32K a year.

      Ding Ding. Qualified engineers aren't going to leave their six figures job to paid less than a person working full time at McDonalds makes.

    54. Re:So what? by gfxguy · · Score: 1

      They spent every penny on iPhones (or similar) and then whine to the gub'ment they don't have money for food. Problem solved! Of course, when you complain about it a large segment of the population will claim that iPhones are now considered a necessity.

      --
      Stupid sexy Flanders.
    55. Re:So what? by DickBreath · · Score: 1

      If Apple is unable to find an exploitable work force in America, then try something like this . . .

      Hey fanboys! Here's a great opportunity to come work for Apple assembling iPhones! It's a fantastic opportunity to see how things work behind the magic illusion. Long hours. No pay. Benefits such as safety nets to prevent workers from committing suicide. Apply today.

      --

      I'll see your senator, and I'll raise you two judges.
    56. Re:So what? by Layzej · · Score: 0

      Americans could bring manufacturing back home in a heartbeat but they need to be competitive. Foxconn employees make $17/day in China. American's could have it all: cheap gadgets and manufacturing jobs, They just need to be more realistic in terms of salaries. Trump's plan to get rid of the federal minimum wage will make America competitive again.

    57. Re:So what? by brantondaveperson · · Score: 1

      You are aware that literally every piece of technology manufactured today is made overseas, right?

      The decision to do this was made by consumers - if consumers refused to buy products made in China, even though those products are cheaper, then this would not have occurred. What kind of phone to you own? Where do you think it was made? How about your TV, your stereo, your home router, etc ,etc?

    58. Re:So what? by brantondaveperson · · Score: 1

      Looks like I'm slightly wrong. Some technology companies do make things in the U.S, although it's likely that the components are made overseas, who really knows?

      Who is manufacturing in America?. Note that there aren't any consumer electronics manufacturers on the list.

    59. Re:So what? by Anonymous Coward · · Score: 0

      And taking an actual stroll around that area when I lived in Taipei, describing Tucheng as gritty and industrial is completely out of place. I don't know where you were looking on your virtual tour, but it wasn't the area in question unless you've never seen a city before or something.

    60. Re:So what? by Citizen+of+Earth · · Score: 1

      If the US corporate tax rate were competitive with the rest of the world, trillions of dollars that cannot responsibly be repatriated right now would come flooding back into the US practically overnight. If corporations tried to do that right now, they could be successfully sued by their shareholders for wasting their wealth. Those trillions of dollars would spur new investment and foreign companies would move their headquarters to the US like they do for any other tax haven.

    61. Re:So what? by Anonymous Coward · · Score: 0

      When so many corporations get around their taxes completely, what can cuts do.

      They don't get around their taxes completely, they move their profits to low-tax regions. This why Apple and similar companies have hundreds of billions of dollars parked offshore, because they were able to avoid taxes by moving the money offshore... but they can't bring that money back to the US without paying punishing taxes on it, so they leave it parked. If tax rates were lower, they would bring that money home and spend it. Tax rates don't even have to be lower than the low-tax regions, because there is value to the companies in being able to bring the money home. They'd be willing to pay reasonable taxes to do that. As long as the US has among the highest corporate tax rates in the world, they won't.

    62. Re:So what? by Anonymous Coward · · Score: 0

      Yes- because the majority of people making minimum wage have other avenues of support. Parents, governmental assistance programs, etc.

      What we should do is eliminate all but the most essential government programs. We don't need government indoctrination programs (ie public schools), toll booths (it increases the costs by about 33% vs paying for these things via taxes), welfare, social security, and the numerous other programs that we have. We should eliminate them and put the responsibility for retirement and other safety nets on the individual where it belongs. The way things work now people have become dependant on government that would otherwise be able to afford these things if not for government intervention. Educational assistance drives up prices beyond where those prices would otherwise fall. If government wasn't an enabler people would shop around for schools they could actually afford which would drive prices down.

    63. Re:So what? by plopez · · Score: 1

      I don't care. I'll switch companies or freelance. I'm not an indentured servant after all.

      --
      putting the 'B' in LGBTQ+
    64. Re:So what? by plopez · · Score: 1

      THey usually have some sort of phone as it is often crucial for job hunting.

      --
      putting the 'B' in LGBTQ+
    65. Re: So what? by Anonymous Coward · · Score: 0

      Hahahahaha

      Companies paying less taxes will then spend it on employees? Next you'll tell us that if we tax the rich less then they'll spend more on what the little people are selling and we'll all get rich!

    66. Re: So what? by Anonymous Coward · · Score: 0

      I'm surprised you haven't outsourced the dodging of your taxes to some foreigner as well.

    67. Re: So what? by Anonymous Coward · · Score: 0

      This. Company that doesn't manufacture in the US says doing so will cost too much. Big deal. What do you expect them to say?

      Company that sells product they don't even make won't be able to sell at current margins. Big deal too. They'll do fine. This is not gonna put them out of business by any stretch, and we need to stop listening to whiny childish CEOs who act like being made to do things that actually benefit the country that allows them to exist will be the ruin of us all.

      It will be the ruin of many exploitative labor practices (like the US doesn't have enough of its own) and of poor environmental practices (read that as 'expecting others to pay to clean up your mess') Corporate freeloading is rampant and has to stop.

    68. Re: So what? by Anonymous Coward · · Score: 0

      Really? They go to tax rates are the lowest, for US taxes to be competitive they'd need to be zero as well.

    69. Re:So what? by dinfinity · · Score: 2

      . But it is worth it, because we pay near zero income taxes. Oh, and here is how many Americans we employ: 0. Our sysadmin is in Shanghai, our graphic artist is in Karachi, etc. You can thank your government for that.

      Yeah, no. Take responsibility for being a selfish fucking asshole instead of blaming the government.

      When I first started paying income taxes I shed a tear. Not because I felt 'robbed', but because I had reached a point where I was financially stable enough to contribute to my country and to all its people. Even though it was a very modest contribution at the time, I was helping to maintain and build roads, the electricity grid and all other vital infrastructure. I was helping to prevent people down on their luck from becoming homeless or starving. I was helping those with illnesses to get medical care. In short: I was helping to build a civilization. And I was and am fucking proud of it.

      Paying taxes is a virtue, not an evil to be avoided at all costs.

    70. Re:So what? by Anonymous Coward · · Score: 0

      No, we need to increase rates and eliminate loopholes. Corporate taxes are already too low.

      A corporation is a pretend person. So tax it like a person.

      And instead of tax incentives for corporations to do something good (say, invest in alternative energy) use tax penalties for doing something bad (fossil fuel production or use) instead.

      If a corporation wants to outsource a job, add a tax equivalent to the difference between that job's salary in the US and in whatever country it's outsourced to.

      No carrot, all stick for corporations.

    71. Re:So what? by R3d+M3rcury · · Score: 1

      Taxes should be simple and fair [...]

      I'm reminded of an old joke about the IRS's new simplified 4 step tax forms:

      1. How much money did you make?
      2. What were your expenses?
      3. How much money did you have left?
      4. Send it in.

      There's the format. It's simple. No loopholes. We might disagree with about how much you should be sending (eg, "Step 4: Send in 20% of that number") but the concept is that you should send x% of your profits. But now we start asking questions...

      What are "expenses"? Suppose the business buys me, it's CEO, a brand new Lamborghini and then says, "Gosh, we barely made a profit after expenses. Guess I don't have to pay any business taxes." Well, yeah, 'cause you bought a Lamborghini and you certainly didn't need to do that. But I don't own the Lamborghini, the business does. So you can't come to me, personally, and say, "Hey, you owe us taxes on that Lamborghini!" because it isn't my property.

      So there has to be some kind of definition of what an expense is. You can't just spend all the business's money on hookers and blow and then say, "Gosh, I made no money."

      If they pay an accountant $80k, and he finds $81k of tax reduction, then it is worth it to the corporation to employ that accountant [...] I spend a lot of time reading up on tax laws. That is time that I could otherwise spend on productive activities. But it is worth it, because we pay near zero income taxes.

      See, this is important: You devote time and effort to finding ways to save money on taxes because it helps your business's bottom line. Your complaint is that you spend lots of time doing it and you wish you didn't have to spend so much time finding ways around it.

      So if the above, simpler, method--a simple "flat tax" if you will--were enacted, you would gladly pony up your 20%? Or would you still find ways--creative expenses and the like--to pay less cash in taxes?

      I maintain that businesses would always be trying to pay less in taxes. Period. It's the nature of the beast--taxes are an expense and businesses want to cut expenses as much as possible.

      Again, the current complaint is that it is "really hard" to cut your tax bill. It would be nice if the government made it easier for you to come up with ways to not pay your fair share.

    72. Re:So what? by sit1963nz · · Score: 1

      weird New Zealand has one of the most open economies in the world, with almost zero trade barriers and tariffs , and yet it is doing well for a country on the arse end of the world where the have all the additional costs of shipping to everywhere. In fact New Zealand has all sorts of issues with the US protectionist economy.

    73. Re:So what? by Anonymous Coward · · Score: 0

      The EU would disagree with you.
      Maybe you were sleeping, or just have your iGoggles on too tightly.

    74. Re:So what? by larryjoe · · Score: 1

      When so many corporations get around their taxes completely, what can cuts do.

      A lot. One of the reasons that corporate tax payments are so low is because the rates are so high, so corporations have a big incentive to lobby for loopholes, and pay accountants to exploit them. If they pay an accountant $80k, and he finds $81k of tax reduction, then it is worth it to the corporation to employ that accountant, but it is an $80k dead loss to society.

      There is truth to this idea. Unfortunately, unless the tax rate is close to zero, i.e., less than the cost of a few accountants, the tax dodge will always be worthwhile. I.e., the motivation is not that the tax rates are so high. Rather, it's that they are above $0.

    75. Re:So what? by fluffernutter · · Score: 1

      Anyone who doesn't pay for high priced accountant is "voluntarily" donating extra money to the IRS because the tax code is so complex you need a dedicated accountant to find the loopholes.

      --
      Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
    76. Re:So what? by shakezula · · Score: 1

      I 100% agree, well said.

      --
      I know what you're thinking. Did I forward 65,535 packets or 65,536 packets?
    77. Re:So what? by sit1963nz · · Score: 2

      The problem is, Trump was pushing how he was going to bring manufacturing back to the USA, effectively promising the angry voters Jobs. It was all about bring jobs to them. Truth is he can't, and won't . Apple makes 60% of its profits internationally. At best you will see Apple split into 2, "Apple International" and "Apple USA" Given the profits from other things like iTunes, Apps, Services etc lets assume that 30% of profits are US based, so at best Apple would bring back 30% of its manufacturing because internationally there is no requirement, there are no import tariffs levied by the US government, and Apple has to remain internationally competitive. Manufacturing is more expensive in the USA (power, water, land, buildings, etc etc all cost more), so end consumer prices will cost more, especially when those costs get distributed on a lower volume of production. You could well see a situation where the iPhone becomes cheaper in the rest of the world than in the USA, and it would not just be Apple, it would be all the major brands of electronics, clothes, shoes, etc etc etc. I am not sure the voters will abide by that either. ANY move by Trump will take time, and by time I also mean legal challenges. To see how quickly this will go just look at how many years have gone by since Apple won against Samsung and its still not finished. AFTER the legal wrangling by all the manufacturers you will get them complying, but very slowly. They know at best Trump is there for 4 years, at worst 8. Failure of Trump producing jobs is likely to see him there for 1 term, and I doubt he honestly wants to be there for two. So, IF apple then drags its feet, i.e. taking time with planning permission, deliberately blocking it up so they delay more because they have to redesign, argue of which state it will be in, delay any law suits that will take, plus any issues with infrastructure (required just to build the factory), they could spin this out way past a Trump 2nd term. And it won't be just Apple. The mid terms may punish Trump too, failure to supply jobs to the people who voted for him, with the rich getting tax cuts at the same time. Trump could loose badly here and be unable to push through his demands, effectively killing the whole process off. Look for lots of money being spent by corporations trying to influence decisions. And to be honest, it much more likely that Trump will be impeached before any manufacturing is bought back to the US. The failure to have a blind trust for his businesses , the non-wall between him and those interests because his children are both in control of the business and part of his team means risks of insider trading is extremely high. So, all in all, its NOT going to happen.

    78. Re:So what? by LemonFire · · Score: 1

      Not only Apple phones are made abroad, Samsung and Google phones are as well. High tariffs on mobile phones would bring manufacturing jobs back to US. However higher mobile phone prices would probably prove to be very unpopular with people in general.

      -- You will not have a pleasant skydiving experience unless you properly prepare and pack your parachute first.

    79. Re:So what? by Anonymous Coward · · Score: 0

      I'm told the cost to make an iPhone is around $178. So add a $178 tariff to each one, and it makes the choice very easy for Apple.

      Yes, the choice for Apple would be very easy, it is either

      1. keep making the iPhones in China and sell for $178 more in the US only to pay for the US tariff, the price remain the same in the rest of the world, OR

      2. spend millions upfront to move production to US and then sell for $178 more to the whole world, including US.

      Considering that Apple sell just as many, if not more, iPhones outside US than within the US, any person with a brain would choose option 1, now Americans can enjoy a more expensive iPhone and pay more tax to Uncle Joe, while changing nothing.

    80. Re: So what? by Anonymous Coward · · Score: 0

      Raise tariffs on importing the phones. Provide tax breaks if they're made here.
      Classic carrot and stick approach.

    81. Re:So what? by Deliveranc3 · · Score: 1

      Since China will reciprocate the tarrif and China will be buying more iPhones any year now...

    82. Re: So what? by cyber-vandal · · Score: 2

      Would it? Why would corporations who pay very little tax suddenly queue up to pay more?

    83. Re: So what? by cyber-vandal · · Score: 1

      Excellent idea. Children can learn to read and write and mathematics by the magic of the market.

    84. Re: So what? by cyber-vandal · · Score: 1

      Is it possible to live on $17 a day on the US?

    85. Re:So what? by penguinoid · · Score: 1

      Yeah, no. Take responsibility for being a selfish fucking asshole instead of blaming the government.

      The problem isn't that he is a selfish asshole. The problem is that the government is paying him to act like a selfish asshole.

      --
      Don't waste your vote! Vote for whoever you want, unless you live in a swing state it won't matter anyways
    86. Re:So what? by MrKaos · · Score: 1

      I have been curious about why you refer to Ezekiel from the bible. Apart from the shock value of the donkey dicks (which I think is pretty funny), is there a particular reason you chose it for your signature?

      --
      My ism, it's full of beliefs.
    87. Re:So what? by dcw3 · · Score: 1

      Why would we want to maximize tax revenue for one of the most inefficient organizations in the US...the federal government? So they can waste more? Give any federal agency more money, and they'll spend it weather they need it or now...that's how it's done. You see it at the end of every fiscal year. They blow whatever remaining budget they have just so they can tell Congress that they needed it. And on top of that, you'll just be adding to congressional pork programs.

      https://www.washingtonpost.com...

      --
      Just another day in Paradise
    88. Re:So what? by dcw3 · · Score: 1

      They don't typically go from paying full taxes to paying none. There's a tipping point where it's more financially lucrative for a business to not ship their shit overseas. And it's not identical for every company.

      --
      Just another day in Paradise
    89. Re:So what? by dcw3 · · Score: 1

      From Apple's 10-K for 2012:

      The Company’s effective tax rates were approximately 25.2%, 24.2%, and 24.4% for 2012, 2011, and 2010, respectively.

      Maybe you should google before making up shit.

      --
      Just another day in Paradise
    90. Re:So what? by dcw3 · · Score: 1

      Oh? And who pays the people that buy the products? Don't play that bullshit game.

      The whole point of this that companies will always try to maximize their profits. So, the only way to incentivize companies to do the right thing is through the ways and amounts that they get taxed. Raise corporate taxes too high, and they head offshore, and those that don't go have less money to fund more/better jobs.

      --
      Just another day in Paradise
    91. Re:So what? by dcw3 · · Score: 1

      And this is why the federal student loan program is a failure. It's artificially raised the price of tuition across the nation.

      --
      Just another day in Paradise
    92. Re: So what? by Layzej · · Score: 1

      Probably not at the level that we've become accustomed, but you can imagine that if labor only costs $17/day then the costs of food would drop, the housing market would adjust to the new incomes, etc. They live on that much in China. There's no reason we can't have the Chinese economy in America.

    93. Re: So what? by cyber-vandal · · Score: 1

      Would the cost of living fall immediately?

    94. Re:So what? by Kernel+Kurtz · · Score: 1

      Japan doesn't import US-made cars to Japan. They make them in the US to ... get around import restrictions! TADA!

      Yes. And the same would be the case with any manufactured goods. The other 8 billion people on the planet are not going to pay more for US built (insert product here). You can make more stuff domestically for your own domestic market, but you will never have the global economies of scale.

    95. Re:So what? by kaatochacha · · Score: 1

      Society doesn't run on good intentions, as much as you'd like it to. And I wouldn't trust it if it did. Lots of people in history started off "with good intentions". It generally ends up with lots of dead people.
      Paying taxes is a duty, not a virtue. Calling it a virtue is silly. Making the tax system reasonable and understandable should be the goal.
      I really don't give a damn about how someone feels good doing it. I just want things to run.

    96. Re:So what? by kaatochacha · · Score: 1

      If a fair % ( IE not 60% or some stupid number) flat tax came into existence with no deductions, you wouldn't be able to find LEGAL ways to avoid it.

    97. Re:So what? by R3d+M3rcury · · Score: 1

      But what would base that flat tax on?

      Profit? Heck, that's easy--just don't make one. Spend your money on stuff and pay no taxes.

    98. Re:So what? by Anonymous Coward · · Score: 0

      You Sir, are an idiot.

    99. Re:So what? by dinfinity · · Score: 1

      I just want things to run.

      No shit.

      Improving the tax code and improving people's attitudes towards taxes in general are not mutually exclusive. I never said or implied that society needs to run on good intentions. That is a straw man you erected.

      What I did say is that the notion that the tax code is responsible for how people act or how they frame why they don't pay (certain) taxes is ridiculous and self-serving. Such a notion is equivalent with saying "Well, nowhere in the rules does it say I can't kick him in the balls, so blame the rules for me kicking him in the balls."
      True as the first part may be, it is still a dick move.

      Does that mean the rules need not make it clearer that kicking someone in the balls is a no go? They probably need to, but it's still a dick move.
      If you believe in 'fewer regulations' however, then some amount of endowing people with the trust not to make dick moves is required. Choose your poison.

    100. Re:So what? by laird · · Score: 1

      No, they were willing to pay above-average US wages. There are very few experienced manufacturing engineers in the US, and schools train very few, so they don't exist. Apple would have had to spend years talking US schools into training people for jobs, then waiting years for those people to be trained, then hired them.

      In contrast, FoxConn staffed the iPhone manufacturing line with experienced staff in weeks.

      This is because US manufacturing destroyed itself. We no longer have that capability, because those companies all wiped out their US capacity and trained China to do their jobs, in order to get hire investor ROI. At least, until the Chinese companies wipe out the US companies. Look for example at how IBM trained Lenovo to make their laptops, then sold the whole business to Lenovo. That made IBM investors money, but wiped out an huge, successful US business. That is, it was bad for EVERYONE other than IBM's investors...

    101. Re:So what? by laird · · Score: 1

      Nope. Apple was willing to pay above-average US wages. The problem was that the people they needed to hire, experienced manufacturing engineers, didn't physically exist in the US in sufficient numbers to staff a large scale consumer electronics manufacturing plant. They're all in China now, because that's where manufacturing is done.

    102. Re:So what? by laird · · Score: 1

      Right. The US still does small-scale manufacturing. It's the large scale stuff (e.g. tens of millions of units a year) that the US isn't capable of. Note that Apple makes their small volume products in the US (e.g. the Mac Pro), just not the cell phones and laptops that they sell millions of.

    103. Re:So what? by laird · · Score: 1

      Read what I wrote. I wasn't talking about line workers, I was talking about the line managers - you need experienced line managers in order to train and manage the line workers. The US trains a few hundred of those a year, and Apple needed thousands.

    104. Re:So what? by Anonymous Coward · · Score: 0

      bs. engineers get way above average US wages already. They need to be willing to pay above average US Engineers wages which they were not.

    105. Re:So what? by Anonymous Coward · · Score: 0

      The "tax holiday" isn't a new concept. The US did it in 2004. It was largely decided - even by right-leaning economic groups - to be a economic failure.

      http://www.businessinsider.com/us-tax-holiday-benefits-shareholders-not-the-economy-2016-9

    106. Re:So what? by HuguesT · · Score: 1

      What is the relationship between your taxes and you employing sysadmins in Shanghai ?

    107. Re:So what? by HuguesT · · Score: 1

      For the whole company? didn't think so.

    108. Re:So what? by HuguesT · · Score: 1

      Fun read :-)

    109. Re:So what? by Coren22 · · Score: 1

      They blow whatever remaining budget they have just so they can tell Congress that they needed it.

      I have discussed this with people in the past, and it was pointed out to me that the budget actually requires the organization spend the money, not that they are just doing it to use up the surplus. I totally agree that it is a really stupid waste of money, but it is congress forcing it, not the people running the agencies.

      --
      APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?
    110. Re:So what? by Coren22 · · Score: 1

      Amen. Many people asking for higher tax rates on corporations are mostly looking from the standpoint of greed. It seems many just assume that corporate taxes are too low, and that raising them will magically produce more income. I wish more would open a business and run one, as they would learn many things about those "evil CEOs" that run corporations.

      --
      APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?
    111. Re:So what? by dcw3 · · Score: 1

      Having worked in and around the government for 40 years, I don't believe that's accurate.

      From : https://www.washingtonpost.com...

      If they don’t, the money becomes worthless to them on Oct. 1. And — even worse — if they fail to spend the money now, Congress could dock their funding in future years. The incentive, as always, is to spend.

      --
      Just another day in Paradise
  2. So? by kimvette · · Score: 4, Insightful

    So they would make $300+ per iphone rather than $500+ per iphone. It's still over a 100% markup, so I fail to see much of a problem.

    --
    The Christian Right is Neither (Christian nor right). See: Matthew 23, Matthew 25, Ezekiel 16:48-50
    1. Re:So? by Anonymous Coward · · Score: 2, Informative

      "According to research company IHS Markit, it costs about $225 for Apple to make an iPhone 7 with a 32GB memory, while the unsubsidized price for such a handset is $649."

      So the Handset costs $225 to make, retails for $649, and Apple tends to target about 26-30% profit on each device they make. So let's say Apple is making about $195 (~200) profit per device, so Apple's overhead for marketing, retailing, R&D is about $229.

      By doubling the cost to manufacture, you are at $450, adding $229 gives you $679 already, so Apple would be losing money charging $649, let alone trying to target 30% profit.

      The $649 phone would wind up being around $880. No shipping costs would really be saved because I am assuming the components for the iPhone would still be sourced from China because that's where the supply chain is nowadays, maybe they factored it into the doubling.

    2. Re:So? by ShanghaiBill · · Score: 4, Informative

      So they would make $300+ per iphone rather than $500+ per iphone. It's still over a 100% markup, so I fail to see much of a problem.

      No. The component cost would not double. Only the labor cost. The component cost for an iPhone 7 is estimated to be about $250, and the assembly labor is estimated to be about $10. The average sale price is $649, leaving a marginal profit of roughly $390 per phone. If the cost of assembly doubled, that would decline to $380.

      The figures would be different if the component manufacturing was also Americanized, but since most of the components are made by Asian companies, I don't see that happening.

      Disclaimer: I didn't vote for Trump, and I think the government telling companies where to make their products is idiotic, but, at least in this case, it would make little difference in the price.

    3. Re:So? by Anonymous Coward · · Score: 0

      Reducing profit margin would then decrease earnings, resulting in a loss of $/share. Shareholders and the board would replace the management team. It is a publicly owned company after all.

      Now if tariffs were introduced, that might change the equation - but I doubt it since China would initiate a trade war resulting in lots of other damage.

      Elections have consequences, but not always what you want or expect.

    4. Re:So? by Anonymous Coward · · Score: 0

      So they would make $300+ per iphone rather than $500+ per iphone. It's still over a 100% markup, so I fail to see much of a problem.

      That won't stop those Apple-loving millenials from purchasing iPhones. You're right - this is a non-story.

    5. Re:So? by Anonymous Coward · · Score: 0

      So they would make $300+ per iphone rather than $500+ per iphone. It's still over a 100% markup, so I fail to see much of a problem.

      No. The component cost would not double. Only the labor cost. The component cost for an iPhone 7 is estimated to be about $250, and the assembly labor is estimated to be about $10. The average sale price is $649, leaving a marginal profit of roughly $390 per phone. If the cost of assembly doubled, that would decline to $380.

      That's not how profit works. There are a bunch of other costs which eat into that number, such as designing, engineering and proving the device just to name a few.

    6. Re:So? by Anonymous Coward · · Score: 1

      Only the labour, and transport, and land, and plant & equipment, and training, and sick days, and healthcare, and taxes, and administration, and HR, and regulations, and etc...
      But don't worry Americans are twenty seven times as fast at sticking all those fiddly things together, even without the years of experience and training the current staff have.
      *waves American flag*

    7. Re:So? by myowntrueself · · Score: 0

      So they would make $300+ per iphone rather than $500+ per iphone. It's still over a 100% markup, so I fail to see much of a problem.

      Of course Apple will just cut back their profit margins and keep them the same price (and still make an outrageous profit). They wouldn't shaft the fanbois no way!

      --
      In the free world the media isn't government run; the government is media run.
    8. Re:So? by ShanghaiBill · · Score: 2

      That's not how profit works. There are a bunch of other costs which eat into that number, such as designing, engineering and proving the device just to name a few.

      You seem to be unfamiliar with the term "marginal profit". Lmgtfy.

    9. Re:So? by ranton · · Score: 3, Informative

      No. The component cost would not double. Only the labor cost.

      There is nothing in the article which makes this claim. Did you read it from another source?

      The article clearly states production costs would double (with no labor / component distinction), and that those costs are currently estimated at $225 for an iPhone 7 with a 32GB memory. So this clearly means the production cost would increase from $225 to $450. The accuracy of statements coming from Foxconn is certainly up for debate, but you seem to be just making stuff up.

      --
      -- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
    10. Re:So? by garyoa1 · · Score: 1

      On the other hand, parts for making ONE phone would be $250. I find it hard to believe that price remains when you're talking millions of phones.

      --
      Wuddooeyeno? IITYWYBMAD? Like nuts? eclecticallyincorrect.com
    11. Re:So? by Kjella · · Score: 1

      No. The component cost would not double. Only the labor cost. The component cost for an iPhone 7 is estimated to be about $250, and the assembly labor is estimated to be about $10. The average sale price is $649, leaving a marginal profit of roughly $390 per phone. If the cost of assembly doubled, that would decline to $380.

      Assuming they actually move the whole assembly process, many companies do some form of pre-assembly if they're required by law to make final assembly somewhere or just want the "Made in <country>" tag without false advertising.

      --
      Live today, because you never know what tomorrow brings
    12. Re:So? by Anonymous Coward · · Score: 0

      You hit the nail on the head! Apple has repeatedly claimed that the actual labor cost of each iPhone is a trivial portion. They cannot now claim that it would double the *total* cost of the phone if it were manufactured here.
      Assholes.

    13. Re:So? by Anonymous Coward · · Score: 0

      So you are cool with being taken advantage of by foreign governments that artificially lower the value of their currency, use child labor and pay their workers pennies on the dollar so you can get an Iphone (a disposable device with no replaceable battery and a walled garden software strategy) for 10 dollars less?

    14. Re: So? by Anonymous Coward · · Score: 0

      Apple claims their products are designed in California. Engineering costs stay the same. Shipping costs of components would increase and would likely follow ocean travel rather than rail or truck as they do now. So your iPhone may have a 3 month release delay if a vessel is lost.

    15. Re:So? by Streetlight · · Score: 1

      I'm not sure there would be any US teenage girls out of high school (or not) willing to live in dorms at a walled factory, 10 to a room, working 16 hours a day, seven days a week for minimum wage assembling small electronic packages. Wages would be reduced by the cost of housing and food.

      --
      In a time of universal deceit, telling the truth is a revolutionary act. George Orwell
    16. Re:So? by Anonymous Coward · · Score: 0

      So, they continue to make the iPhone for every other country in China, i.e. about 60% of them and charge US customers another $100 "Trump Tax"

      Canada could see an influx of Americans going across the boarder to buy iPhones instead of Meds.

      However, if Apple sells its Chinese iPhone to its self at cost, then that will only see a 45% increase in costs, so the US price will not need to go up as much.

    17. Re:So? by Scragglykat · · Score: 1

      You are assuming the cost doubling is just the labor portion. I'm pretty sure they are saying the entire cost including labor, will MORE than double, because, in the US, you can't work people for less than $17 per day, as is reported the case with Foxconn assembly workers. Add to that, the extensive research that points to a lack of available workforce in the US capable of working these jobs, and you have lost of financial problems. iPads reportedly take over 300 people and 5+ days to assemble, test and prepare for your use, each.

    18. Re:So? by LeftCoastThinker · · Score: 2

      In developed countries, like the US, we have this thing called automation. It is more reliable than manual assembly, it just requires initial investment. Once you invest in automation, you can hire Americans who have a manufacturing engineering degree to work at the plant and let them work to ensure that the automated systems run smoothly/get updated/maintained. Instead of 10,000 workers making $20k/year, you have 1000 engineers making $90k/year.

      This is just PR BS from Apple because they know that Trump is going to start a trade war with China until we have a level playing field. All of the mega-corporations have been screwing over the US and the environment to squeeze out a few more bucks, and that is going to end with Trump.

      --
      If you disagree, please post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like
    19. Re:So? by pnutjam · · Score: 1

      Hey, I take money out of my wages for housing and food.

    20. Re:So? by Some_Llama · · Score: 1

      making one phone is 250$ if you divide the cost of a million phones against the total cost.

      apple is certainly not doing it the other way around.

    21. Re:So? by josquin9 · · Score: 1

      Yes, but, aside from the labor component that has theoretically been accounted for, those costs shouldn't change. They're not variable, once the phone is in production. They're just unknown one time costs at the time of budgeting. But Apple will have to do the same design and QA/QC either way, since those are based on the consumer protection laws and norms of the purchaser's country.

    22. Re:So? by tbannist · · Score: 1

      I'm not sure why you would need to do exactly that. If they put the plant in Michigan, hire a bunch of middle aged former factory workers, organize them into 3 shifts of eight hours, they should be able to run the plant 120 hours a week. The plan becomes a little more complicated if you want to run 7 days a week all the time, but that problem can be solved.

      --
      Fanatically anti-fanatical
    23. Re:So? by squiggleslash · · Score: 1

      Well, no, they wouldn't, because they wouldn't sell the phones.

      In business, you charge an optimal price for a item. You go into business selling that item if you can produce it for less than the optimal price.

      Yes, the optimal price will vary a little if the profit margin is substantially lower, but it's still going to be in the same ballpark using the figures quoted here. Could Apple get away with selling their iPhones for $800? Probably not, it would result in a colossal loss in sales.

      --
      You are not alone. This is not normal. None of this is normal.
    24. Re:So? by Streetlight · · Score: 1

      Remember the song "Sixteen Tons" by Tennessee Ernie Ford. Part of the Lyrics, "You load sixteen tons, what do you get? / Another day older and deeper in debt / Saint Peter don't you call me 'cause I can't go / I owe my soul to the company store" This was the way corporate labor worked before the advent of labor unions, and certainly in some industries including mining and agriculture. You worked for a mining company or as a migrant farm worker, lived in a shack owned by the company and bought everything, including food and clothing, from the company's store, all this eating up more than your income.

      Foxconn uses enormous amounts of robotics in manufacturing but it also requires large numbers of hand laborers. Can all of that be eliminated by automation? Probably not. And the hand laborers are indebted to "the company store." Could US manufacturing return to the olden times of the itinerant farm worker and miner? Possibly.

      --
      In a time of universal deceit, telling the truth is a revolutionary act. George Orwell
    25. Re:So? by aaarrrgggh · · Score: 1

      Labor, but also shipping, time delays and inventory in transit for a wider supply chain, regulatory compliance, etc. I can't see a way where the asssembly cost would not increase by a minimum of 5x, and more likely 10-20x when everything is added in.

    26. Re:So? by AmiMoJo · · Score: 1

      Component cost would go up too. You have to ship thousands of parts for all the different models to the US, rather than one completed unit. Transport costs, paperwork, customs...

      China has the whole supply chain.

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    27. Re:So? by Anonymous Coward · · Score: 0

      Its actually over 1000% markup, so they could drop the retail price to $150.00 and still be making money hand over fist!

    28. Re:So? by hambone142 · · Score: 1

      Manufacturing cost is only the labor required to assemble and test the product. Product cost includes parts and supply chain (and overhead). Labor contained in an iPhone is estimated to be 15-30 dollars.

    29. Re:So? by Anonymous Coward · · Score: 0

      Why would the cost of components double? He's making an educated guess that the associated costs that need to increase are those of labor. There would likely be some marginal increase in component cost (due to imports), but it would be fractional.

      Now, if they tried to move all component manufacturing, then of course we're talking a different situation. However, since they source their parts, like RAM and the camera parts, from Asian companies, it seems unlikely that they would (or even could) force them to also be built in the US.

    30. Re:So? by hambone142 · · Score: 1

      Foxconn and SCI already have a manufacturing presence in the Bay Area. The are smaller plants but I'm sure they'd be willing to expand in business friendly states. I've protyped in the facilities.

    31. Re:So? by Anonymous Coward · · Score: 0

      So first thing, whenever people give these costs of the product like $250 for the iPhone 7, I highly doubt Apple pays that per phone based upon my experience in this area. I think its substantially lower than that based upon my previous experience. I would estimate that Apple pays more like $100 per phone in components to build rather than these like $250 costs people are saying. But if you factor in all of the capital expenditures they make to buy machines and robots and stuff like that to custom build and assemble many things, the costs definitely go up. Remember, Apple makes their own CPU design, so they don't pay Intel or Qualcomm a premium, they just pay to have it built by Samsung or TSMC - probably $10 per CPU.

      Here is how the costs are broken down:
      1) LCD/touchscreen/cover glass module
      2) CPU/RAM package on package
      3) Modem / baseband chipset
      4) Flash memory
      5) Wifi/bluetooth/cellular front-end IC's, 9-axis gyro/acc, GPS, audio, charging / power management IC's, and specialized connectors (basically the "other" stuff on the PCB)
      6) camera modules
      7) speaker/microphone modules
      8) The PCB itself, and all of the various flex circuits inside
      9) Battery
      10) Housing
      11) packaging / carton's
      12) labor to assemble everything in the phone, and test it, provision it, and pack it up in retail boxes, then pack those boxes into cartons
      13) logistics costs of getting many millions of parts imported into the China assembly factories, "kitting" (preparing components for assembly or automated assembly)
      14) incoming and outgoing quality control -- basically you just received a batch of 10 million wifi modules from Japan, how do you test and verify they are good before assembling them all onto the PCB?
      15) Shipping costs to all over the world and taking care of all customs and duties and whatever of the finished product

      So where am I going with all of this? Well, the display is made most likely in Japan by JDI, the CPU made by TSMC or Samsung, the battery made by some specialized battery supplier, wifi/BT module made by murata or broadcomm, motion sensing chips by ST or Bosch, the modem made by qualcomm in Taiwan, Flash made by samsung, ram made by samsung or somebody similar, PCB could be made in Japan or Korea, connectors and FPC's made in China/Korea/Japan, Camera from Japan, power management from Qualcomm, GPS from Skyworks??, and finally the housing is machined and built probably 90% in china someplace. Anyway, so in my list above, lines 1-10 comprise roughly 90% of the cost of the final BOM -- maybe $100. Then lines 11-15 are fuzzy costs of building the product. These tasks take a ton of people. Initially, Apple would not want to move many of the machines from China for building the housing (they are custom made for them anyway and moving tons of CNC machines would cost a ridiculous amount of money anyway), but eventually running the machines in the US could be done to build the housing there as well.

      So Foxconn will basically say, "ok we will take in your BOM of various components into our factories and output iPhone's at like 1 million per day, so the cost would be $20 per phone for everything top to bottom". Then Tim Cook signs off on that and they start.

      So if you think about that, then lets say Foxconn's cost goes up by even 3X, then instead of charging Apple $20, they would charge them $60 to "assemble" the product in the US. All of the components you would still build in the various originating countries like Korea, Japan, Taiwan, China, but assembly done in the US, I think the biggest issue is that you would need to build up a massive, and I mean massive work-force in one area of the US to build 500k phones per day. Imagine that the line has 300 steps. Each step takes less than 10 seconds, that means every 10 seconds you get a new iPhone at the end of that line. Assuming they do 3 shifts, each are 8 hours per day, and 30 min break per 8 hours, you have 22.5 hours per day of work happening. So in 22.5 hours you would get 8000 iPhones built.

    32. Re:So? by guruevi · · Score: 1

      I think that research was debunked. There is $225 worth of materials in the iPhone. There is a huge development, marketing, sales etc cost.

      --
      Custom electronics and digital signage for your business: www.evcircuits.com
    33. Re:So? by pnutjam · · Score: 1

      My comment was tongue in cheek, the company store paradigm is a huge worry, something that poor Americans deal with already.

    34. Re:So? by ausekilis · · Score: 1

      The component cost *would* change, though not necessarily double. It takes a lot more materials to pack up the parts of 1000 phones for assembly than it does to ship 1000 phones.

    35. Re:So? by Anonymous Coward · · Score: 0

      How does it double the labour cost only? The average Foxconn worker is being paid ~20RMB/hour, at 0.16RMB/USD that is about $3.20/hour.

      US labour for factory assembly is going for USD6.40/hour? Really?

      Who upvoted this to be informative?

    36. Re:So? by ShanghaiBill · · Score: 2

      There is nothing in the article which makes this claim. Did you read it from another source?

      No, I got it from a different resource called "my brain" using a technique called "thinking". There is no reason whatsoever that component costs will significantly change just because the phone is assembled in America. Only assembly costs would change.

      The article clearly states ...

      The article does not "clearly" state anything. It is muddled writing by an incompetent journalist.

    37. Re:So? by ShanghaiBill · · Score: 1

      On the other hand, parts for making ONE phone would be $250.

      No. The $250 component cost is based on the volume pricing offered to Apple. If you bought one each of the components, it would cost you far more than that, if they were available at all.

      Go try to buy ONE A10 processor. Good luck.

    38. Re: So? by Anonymous Coward · · Score: 0

      Finished products often require more careful shipping than components, and components would be required by the container load, so costs for components are not likely to be higher unless the iPhone yield is low.

    39. Re:So? by Anonymous Coward · · Score: 0

      WOW, just WOW.

      Your ignorance of China is just astounding.

      To make a million phones a day the factories ARE heavily automated, Foxxcon has just laid off 60,000 workers because they have automated another part of the process and are working with even newer automation/robotics to automate even more.

      And its NOT going to end with Trump, Trump will not even be president before an iPhone is made in the USA, even if he gets a 2nd term.

      Do you have any concept how big these factories are ?
      Do you have any concept about how long they take to build ?
      Do you have any concept of the infrastructure they need, just to build the factories ?
      Do you have any concept about the design times of industrial manufacturing processes ?

      No wonder American politics is about personalities because it seem clear most Americans are not capable of thinking their way through complex issues.

      In many areas, China is far more advanced than the USA, for example high speed public transport, it make US public transport look like a horse and buggy.

      You think the Hoover Dam is big, the Three Gorges Dam is 5 time larger !

    40. Re:So? by Razed+By+TV · · Score: 1

      No, I got it from a different resource called "my brain" using a technique called "thinking". There is no reason whatsoever that component costs will significantly change just because the phone is assembled in America. Only assembly costs would change.

      I see your point, but the logistics of shipping a variety of components (that were natively available in China) can't be cheap.
      Also, a US factory worker costs at least 10 times as much as a Chinese worker. If it costs $10 in Chinese labor, its at least $100 for US labor.

    41. Re:So? by Enigma2175 · · Score: 1

      Foxconn uses enormous amounts of robotics in manufacturing but it also requires large numbers of hand laborers. Can all of that be eliminated by automation? Probably not.

      Of course those jobs can be eliminated, and they will be when it makes economic sense to do so. Just a few months ago there was a story going around that Foxconn replaced 60,000 jobs with automation and it's only going to accelerate as automation and AI gets better. You're right that not ALL jobs will be eliminated, but enough of them will that it will cause societal problems.

      --

      Enigma

    42. Re: So? by Anonymous Coward · · Score: 0

      "Business friendly" meaning "piss poor worker protections and no concern for pollution or making companies pay for the damage they do", right?

    43. Re: So? by Anonymous Coward · · Score: 0

      Only the labour, and transport, and land, and plant & equipment, and training, and sick days, and healthcare, and taxes, and administration, and HR, and regulations, and etc.

      You think companies are entitled to free labor with no restrictions? Wah! My business model doesn't work if I actually have to PAY for stuff!

      How about instead of complaining about the very meager benefits we have in the US we try to make sure that we get more and people in other countries do too? This race to the bottom crap needs ending with a quickness.

    44. Re:So? by Streetlight · · Score: 1

      My original comment was also somewhat tongue in cheek, perhaps applicable in many cases today, as you point out, but very applicable in the past. The company store could be a credit card, near zero checking account, student loans even for folks with OK jobs, landlords to whom rent is due, and more. I'm guessing that the situation I described in an earlier comment about the Chinese Foxcon near slave labor situation of young women or girls living in crowded dorms and working to assemble small electronic devices might be another example of owing to the company store.

      --
      In a time of universal deceit, telling the truth is a revolutionary act. George Orwell
    45. Re:So? by ShanghaiBill · · Score: 1

      Also, a US factory worker costs at least 10 times as much as a Chinese worker. If it costs $10 in Chinese labor, its at least $100 for US labor.

      No. Americans are far more productive than Chinese. The better productivity does not make up for the higher wages (if it did, everything would be made in America), but it makes up for much of it. So $10 in Chinese labor can be replaced with $20 in American labor, just as Foxconn claims.

    46. Re:So? by Anonymous Coward · · Score: 0

      Could Apple get away with selling iPhones for $800?

      Considering that the iPhone 7 Plus 256GB model is $969, I think the answer is a pretty unequivocal YES.

      Because they are already MORE than $800.

    47. Re:So? by Anonymous Coward · · Score: 0

      The problem is, you're assuming the cost of manufacturing only would double. What if they already took what you said into account and they meant that the phone would cost $1,298 unsubsidized? (So had a manufacturing cost goes from $225 to $874.)

      I could actually see this happening if you can pay someone in China $2/hr and someone in the US $7.25/hr. (3.6x more expensive labor and $874/$225 = 3.8x.)

    48. Re:So? by fubarrr · · Score: 1

      Well, I don't trust much IHS people. 5 years ago, they were claiming that iphone's battery costs 12 bucks, which is nonsense. I can get a better one for 90 cents retail in a mall downstairs.

      Wholesale price from a fab for 20k plus waffers should be $12-13 per die for the latest process A10 sized chip. Remember, A10's die is smaller than its front-end (they use InFO). TSMC is milking Apple laowais haard

    49. Re:So? by sit1963nz · · Score: 1

      Oh I dont know Maybe because the factory : Was built in the USA, costing USA prices Is built in the USA and has to pay USA prices for electricity, water, land taxes, etc etc etc Is built in the USA so that all the maintenance is at US wage rates Environmental issues take a higher priority and cost more to overcome And Chinese wages are about 1/10th that of US wages, not 1/2, so the wage component would be 10 times higher, $100 instead of $10

    50. Re:So? by LeftCoastThinker · · Score: 1

      So first off, there was a bit of sarcasm in my original post, sorry if you missed it.

      Second off, calm down for a minute and and think through what you are saying:

      --Foxconn is now implementing a lot of automation in order to cut costs and improve reliability.

      This automation could just as easily be implemented in the US.

      --Do you have any concept how big these factories are?

      Yes, actually I have seen Shenzhen among other manufacturing hubs. I am confident that the US has enough space to build equivalent factories (really they are just assembly buildings, not factories in the traditional sense).

      --Do you have any concept about how long they take to build ?

      Actually, you can crank out 100k plus square foot buildings with cement walls and steel roofs in under 6 months if you push all the little shit bureaucrats out of the way. Build 10 in parallel and you have 1M square feet to work with. The floor space is not really a barrier.

      --Do you have any concept of the infrastructure they need, just to build the factories ?

      Foxconn is not a factory, they are a CM (contract manufacturer). All the parts are delivered to Foxconn and then Apple sends hundreds of US engineers to train the people over at Foxconn (usually for months at a time) on how to assemble each component. Most of the chips and components that go into an iPhone can just as easily be manufactured here in the US (and at one time that type of component was, but has been moved to China because of the virtually nonexistent environmental regs combined with very cheap labor).

      --Do you have any concept about the design times of industrial manufacturing processes ?

      I have designed over 30 products from whiteboard concept to manufacturing release, and it varies from about 6 months to more than 4 years depending on the starting point, level of complexity, production volume, etc. With the iPhone these days, the level of innovation is about as revolutionary as the automotive industry; it has become more iterative than revolutionary.

      Lets be honest, it would be almost trivial from a logistics standpoint for Apple, based in the US, with their huge stash of cash to start to shift their manufacturing back to the US. No one thinks that it would happen all at once, but it would be easier than their shift to manufacturing in China, so saying that it is impossible makes your position questionable.

      --
      If you disagree, please post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like
    51. Re:So? by stealth_finger · · Score: 1

      . Add to that, the extensive research that points to a lack of available workforce in the US capable of working these jobs,

      You're saying Americans aren't capable of menial factory jobs Chinese teenagers do? An available workforce WILLING to do these jobs, now that's another issue.

      --
      Wanna buy a shirt?
      https://www.redbubble.com/people/stealthfinger/shop?asc=u
    52. Re:So? by Anonymous Coward · · Score: 0

      You have claimed this multiple times now, but have yet to show any evidence whatsoever that Americans are so much better at manual labor.
      And no 'your brain' and 'thinking' are no substitute for facts.
      If your brain is telling you that American workers are five times as fast at putting something together as a Chinese worker, then you have a problem with your brain.

    53. Re:So? by RockDoctor · · Score: 1

      This was the way corporate labor worked before the advent of labor unions, and certainly in some industries including mining and agriculture.

      You missed the bit about people being paid in "Company Scrip", which would be the only currency that would be accepted at the Company Store. And the Company Store is the only store that operates in the Company Town!

      Trade Unions fought to stop this and ensure that wages were paid in national currency. People died in those fights. But they'll be back before long.

      --
      Birds are not dinosaur descendants;birds are dinosaurs, for all useful meanings of "birds", "are" and "dinosaurs"
    54. Re:So? by crunchygranola · · Score: 1

      Why would shipping the components of an iPhone be a more crippling cost than shipping the completed iPhone itself, which is what they do now? iPhones, and their components, are very small, light high value items. Shipping costs are trivial.

      --
      Second class citizen of the New Gilded Age
    55. Re:So? by david_thornley · · Score: 1

      the logistics of shipping a variety of components (that were natively available in China) can't be cheap.

      Why not? You load them into containers and ship them across the Pacific. The logistics get less immediately flexible, because it does take time to cross the Pacific, but it isn't expensive.

      --
      "When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
    56. Re:So? by Razed+By+TV · · Score: 1

      Why not? You load them into containers and ship them across the Pacific. The logistics get less immediately flexible, because it does take time to cross the Pacific, but it isn't expensive.

      More than a third of their suppliers are in China.
      If they get sent the wrong part, or have a quality control issue, it will take them weeks to find out they have a problem. If that quality control issue isn't discovered while the ship is in route, the duration of the trip will be wasted manufacturing non-conforming product.

      It also seems intuitive to me that the logistics of making sure that the 300+ suppliers (already in China) get their product to the right place gets more difficult/expensive when you have to cross the ocean, as opposed to tracking completed iPhones from a few factories in China to the US. Is that flawed? Is it really not that much more expensive, despite someone having to manage those logistics?

    57. Re:So? by bluegutang · · Score: 1

      The component cost for an iPhone 7 is estimated to be about $250, and the assembly labor is estimated to be about $10.

      But where are these components (CPU, memory etc) made? In China by chance? If the $250 worth of manufacturing value is still produced in China, but the extra $10 or $20 is produced in the US, the iPhone would be "US-made" in name only.

    58. Re:So? by lsatenstein · · Score: 1

      So they would make $300+ per iphone rather than $500+ per iphone. It's still over a 100% markup, so I fail to see much of a problem.

      The phone which today costs $30, fob factory would increase to $60,fob factory. The other costs are insurance costs, marketing, provisions for defects, transportation and marketing. Transportation costs would drop, and so would duties.

      --
      Leslie Satenstein Montreal Quebec Canada
    59. Re:So? by gravewax · · Score: 1

      The chinese factories are already some of the most advanced and automated in the world. But when you are producing 200 million phones a year in a factory their is still going to be a lot of people feeding that automation.

    60. Re:So? by Anonymous Coward · · Score: 0

      Actually you seem unfamiliar with the concept. Marginal profit still requires you to take into account fixed costs like marketing and he has ignored the non fixed costs of retail, transport and packaging. You can't just take base component cost and calculate marginal cost on that as Otherwise the rules for marginal profit become meaningless. The OP only included the fixed component cost per item yet ignored the rest which add an estimated 100-200 per unit. Iphones sell at very high margin but that high margin is still only around 30%.

    61. Re:So? by Anonymous Coward · · Score: 0

      1M Square feet LOL. We are not talking dinky little factories here. Foxconn passed 30 million feet in their shengzen factory a few years ago.

    62. Re:So? by reboot246 · · Score: 1

      "People died in those fights. But they'll be back before long."

      Reincarnated perhaps?

  3. If the cost to make them will "more than double" does that mean they will double the price passed on to us? In other words, will they double their profits as well? Or are they screaming and crying how they won't be able to make them "cost effectively" in the mean-old-USA.

    In other, other words, how much profit in built into an iPhone anyway?

    --
    So rise up, all ye lost ones, as one, we'll claw the clouds.
    1. Re:So by kuzb · · Score: 3, Informative

      It's estimated that the iPhone 6+ costs about $236 US to make. They've been gouging customers for years.

      --
      BeauHD. Worst editor since kdawson.
    2. Re:So by JustAnotherOldGuy · · Score: 3, Insightful

      In other, other words, how much profit in built into an iPhone anyway?

      That metric really depends on how many child laborers you can fit into each factory.

      --
      Just cruising through this digital world at 33 1/3 rpm...
    3. Re:So by Dog-Cow · · Score: 0, Redundant

      You seem to be a fucking moron. Go learn some basic economics and be shocked and amazed that at no time is the price of a product directly related to the cost of its manufacture. The cost may set a lower bound, but loss-leaders are called that for a reason. If you could buy iPhones cheaper from someone else, Apple would be gouging you. But you can't, so they aren't.

    4. Re:So by Anonymous Coward · · Score: 0

      What do you mean? African or European child laborers?

    5. Re: So by Anonymous Coward · · Score: 0

      The doubling of price is in reference to assembly costs. So it is like 2x $20. This isn't doubling of $650. Also, parts costs don't double when assembled in USA vs China.

    6. Re:So by Killall+-9+Bash · · Score: 1

      Cost to 'manufacture' (i.e. assemble the outside sourced components): $5. So, the $650 phone might skyrocket in price to $655.

      --
      "Prediction: within 10 years, Windows will be a Linux distribution." Me, 7-6-2016
    7. Re:So by shmlco · · Score: 1

      According to teardowns, component and assembly costs for phones like the Samsung Galaxy S7 and Note 7 are in the same $250-ish price range and Samsung doesn't do their own system software R&D.

      So either Samsung is also gouging their customers... or perhaps there's just a little bit more to phone costs other than the price of a chip, case, battery, and screen...

      --
      Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
    8. Re: So by Anonymous Coward · · Score: 0

      they might

      right now the supply and tax lines are set up to send these parts to China fast. setting up new supply lines to the USA and making sure there is enough capacity to run them and have the financial laws set up for apple not to pay taxes on any of this stuff

    9. Re:So by CaptainDork · · Score: 3, Informative

      They are charging too much for their broad offering of products

      "If Apple's cash hoard was its own company, it would be the 11th largest company in the S&P 500, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indice."

      They have a shit load of cash.

      --
      It little behooves the best of us to comment on the rest of us.
    10. Re:So by Freischutz · · Score: 1

      According to teardowns, component and assembly costs for phones like the Samsung Galaxy S7 and Note 7 are in the same $250-ish price range and Samsung doesn't do their own system software R&D.

      So either Samsung is also gouging their customers... or perhaps there's just a little bit more to phone costs other than the price of a chip, case, battery, and screen...

      Stop ruining his hate session with 'facts'.

    11. Re: So by Yvan256 · · Score: 1

      If some parts are still made in China, however, the shipping cost will be higher because they won't be packed in the same density. They're also heavier because of their packaging, i.e. reels of SMD parts are heavier than the SMD parts alone. I'm not saying their cost will double but it also won't stay the same.

    12. Re:So by Tx · · Score: 2

      How much is too much? Basic business rules say that you charge as much as the market will bear. Since the biggest problem with selling the iPhone 7 at the moment seems to be getting enough of them in stock to satisfy demand, I would say that the market is bearing the current prices just fine. Thus they cannot be said to be charging "too much".

      --
      Oh no... it's the future.
    13. Re:So by liquid_schwartz · · Score: 1

      It's estimated that the iPhone 6+ costs about $236 US to make. They've been gouging customers for years.

      But the cost of the electronics should largely be the same regardless of where it's made, that part wouldn't double. The labor content is a small piece of the $236.

    14. Re:So by MightyYar · · Score: 5, Insightful

      Apple is selling at monopoly prices.

      And yet, I - like most smart phone owners - have an Android phone that cost less than $200. There is no monopoly here, only a company that has a happy and loyal customer base.

      --
      W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
    15. Re:So by CaptainDork · · Score: 2

      They can and do charge too much.

      By way of example, look at Bill Gates.

      That simple bastard charged so much he can't burn through his cash before he dies.

      --
      It little behooves the best of us to comment on the rest of us.
    16. Re:So by joh · · Score: 1

      And a cup of coffee costs less than $0.1 to make. Don't pay more or you're being gouged.

      Also, if you're serious don't take more money for your work than what you need not to starve and freeze to death until the next day. Everything above this is evil profit. So give if back to your employer. Or even better: Start a company that makes and sells something like the iPhone with no or little profits, even if you could sell it for more.

      Things don't work this way. Everybody sells what he has for the best price he can get for it. It's called a "market". It sucks, but all other ways to deal with this that have been tried suck even more. I agree that this is sad, but it is how it is. And you don't need to buy an iPhone. You can buy one, if you want to though. It's just an option and freedom is not about having no options.

    17. Re:So by zieroh · · Score: 1

      Of course Apple is gouging you, how else do they have so much money?

      By selling a product that people like and want to buy? Just a guess, but what do I know.

      --
      People who say "sheeple" have about as much sophistication as an AOL user, and in fact are probably actually AOL users.
    18. Re: So by ranton · · Score: 1

      The doubling of price is in reference to assembly costs. So it is like 2x $20. This isn't doubling of $650. Also, parts costs don't double when assembled in USA vs China.

      There is nothing in the article which makes this claim. Did you read it from another source?

      The article clearly states production costs would double (with no labor / component distinction), and that those costs are currently estimated at $225 for an iPhone 7 with a 32GB memory. So this clearly means the production cost would increase from $225 to $450. The accuracy of statements coming from Foxconn is certainly up for debate, but you seem to be just making stuff up.

      --
      -- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
    19. Re:So by kuzb · · Score: 2

      There's a difference in what is considered "reasonable" when talking about $1.50 vs $800+. Most people don't consider $1.50 unreasonable, even if the coffee only costs $0.01 to make. Sure it is technically gouging, but it's also very easy to make your own coffee if that's unacceptable to you. Try making your own smartphone.

      --
      BeauHD. Worst editor since kdawson.
    20. Re:So by Anonymous Coward · · Score: 0

      Found the crapple fanboy.

    21. Re:So by kuzb · · Score: 1

      That's artificial scarcity, not apple going full tilt. The oldest move in the Apple playbook is to under-produce in order to stoke the idea of exclusivity. They do this with every single release. Say what you want about the i-products, but their marketing team is genius.

      --
      BeauHD. Worst editor since kdawson.
    22. Re:So by bluefoxlucid · · Score: 4, Informative

      Most companies (Apple and Microsoft being notable exceptions) have narrow or unstable margins (and even Microsoft has a cycle of loss years and profit years). The average profit margin in U.S. in total is 10%; 90% of income goes to wages.

      All wages are paid from revenues; revenues are paid from sales; and sales are paid from income. Making a product requires labor from many people, fractioned together. If you have 100 people at $10/hr making 1,000 widgets per hour, that widget costs $1, and can have a price no lower than $1. Each of those people, in that 1 hour, makes enough money to buy 10 such widgets.

      In one sense, those people are trading widgets for other widgets (or food). In another sense, they're trading labor for labor (time). When you make $20/hr, you're essentially trading 1 hour of your time for 2 hours of theirs.

      That means money is kind of a closed system. There's a limited amount of income in any time frame, which determines what can be bought and what jobs can exist at that technology level. When you add in trade, you're moving income between isolated trading partners, which works the same way. Central banks can issue more money, allowing banks to give loans, allowing consumers to spend more, which adds money to the system; however, this counters technical progress (which causes deflation) and enables inflation (which makes your loan payments shrink in purchasing power over time). In the end, you're still dealing with trading hours for hours; mucking about with money just creates (and modifies) a representation of that time.

      It gets more complex than that.

      We can modify time.

      Over a 100-year span of time, you can safely increase the level of technology such that productivity goes up by 10 times. If, overnight, you double productivity, then you have a need for half as many workers, and get instant 50% unemployment (this is the fear with automation); that collapses your economy. If you do this slowly over years, you create some unemployed, and then create a need for more jobs as prices fail to keep with inflation: your costs drop because the same wages are paying for less time, so the wage cost lowers, and market pressures still set you at the same general profit margin.

      So you get enough technical progress to make 10 times the stuff in the same labor. The same proportion of dollars doesn't reflect the same buying power; or, to put it simply, 1 hour of labor buys 10 times as much stuff. That means even a 10% profit margin is 10 times bigger, because it's 10% of money representing the labor costs of making a thing, and that's kind of huge.

      So the answer to your question is complex. The short answer is the profit margins stay the same, in the long-run; and the prices go up to adjust for rising costs (or down to adjust for falling costs--though "down" can be slower if the market isn't experiencing a flurry of change and competition). Those margins would actually have less purchasing power if industries have higher costs.

      In the long-run, technical progress as I described drives the entire progression of economies. In the short-term, wage inequality and other opportunistic behaviors create fluctuations. It looks something like this. Trade tends to lower prices; Malthusian growth tends to adjust out any jobs you gain or lose through trade deals etc., so both the job creation argument and the job loss argument (we'll lose jobs if we pay American workers over a certain wage to replace Chinese manufacture--it's $18/hr for men's cotton pants, for example) are meaningless.

      Rising costs mean more poverty and poorer people--not poorer rich people, but poorer consumers who have to barter their time against the time of other working-class workers. It is mathematically-impossible to disconnect wealth from the total wage cost of making products.

    23. Re: So by bluefoxlucid · · Score: 1

      If we're forming the plastic casing here, that's less-efficient.

      Shipping cost is pointless, anyway. The shipping cost of a 40-foot shipping container for import to the U.S. from China is under $1,300; it can carry 40,000 trousers or jackets, at a 6.5 cent per-unit price. The import share of those articles is $6.12--at $3.50/hr Chinese labor, including wages and social insurances.

      You're shipping a lot of styrofoam and air in an Insignia TV box.

    24. Re:So by bluefoxlucid · · Score: 1

      Actually, stuff made in USA fabs routinely stacks up at 3-8 times the cost of Korean fabs. There's a lot of labor in a fabrication plant.

    25. Re:So by bluefoxlucid · · Score: 1

      A cup of coffee requires the barista's labor, the manager's labor, the roasted bean shipper's labor, the roaster's labor, the green bean shipper's labor, the farmer's labor, the chemist's labor (Fertilizer, pesticide), the fuel producer's labor (farm tools, building power, roasting machines), machinist labor, oil miner's labor, power plant engineer labor, water distribution labor (municipal water supply, irrigation), logistics to move all this stuff, payroll, bankers, and the people making the cups.

    26. Re: So by Anonymous Coward · · Score: 0

      You think Apple gave Foxxconn all the numbers? Foxxconn's only know about costs that affect then, assembly costs.

    27. Re:So by DaveyJJ · · Score: 1

      Huh? I... I don't know that. Auuuuuuuugh!!!!!!!

      --
      DaveyJJ
    28. Re: So by Anonymous Coward · · Score: 0

      200 million iphones per year * $5= $1 billion

    29. Re:So by speedplane · · Score: 1

      In other, other words, how much profit in built into an iPhone anyway?

      That metric really depends on how many child laborers you can fit into each factory.

      Yes, and multiplied by the number of workers that commit suicide before receiving benefits.

      --
      Fast Federal Court and I.T.C. updates
    30. Re:So by Anonymous Coward · · Score: 0

      Where does profit end and gouging begin?

    31. Re:So by Streetlight · · Score: 1

      Don't forget the costs associated with the building in which the coffee is made: rent, electricity, fuel for heat when needed, janitorial services, building maintenance if not rented, property taxes if not rented, security systems, internet connection, ....

      --
      In a time of universal deceit, telling the truth is a revolutionary act. George Orwell
    32. Re:So by Anonymous Coward · · Score: 0

      They've been gouging customers for years.

      Not according to the customers. (I don't think I've even heard a non-customer say they're avoiding iOS devices due to them costing too much.)

      Even at $700 it's a pretty cheap computer. I paid more than that for the Athlon II+mobo+psu+case+keyboard+monitor that I'm typing this on. Sure, you can get cheaper ones (and very easily get far better ones) than an iPhone, but it's still a damn-well-selling item so I really doubt anyone's getting gouged. If they were getting overcharged, they'd just say no.

    33. Re:So by Anonymous Coward · · Score: 0

      Selling at subjectively-monopoly prices, but objectively not a monopoly. And how is it "unreasonable?" People say yes, when they could trivially say no and have a much nicer experience. I think Apple could get away with raising prices and The People would give the decision a thumbs-up.

    34. Re:So by Anonymous Coward · · Score: 0

      So does Samsung. You've just been drinking deep of the Slashdot kool-aide. Even the new editors can't help but to take cheap shots at Apple. It's disgusting.

    35. Re:So by Anonymous Coward · · Score: 0

      It occurs to me that the design for the iPhone wasn't just willed into existence. Obviously other phone manufacturers spend time and money designing their phones and the accompanying software but I'd argue that Apple spends more on average. This is reflected in the higher price but let's not forget that iPhones include iCloud support, a moderated app store, and brick-and-mortar shops.

      Google provides similar services for Android - but they make a considerable income from advertising and I'd imagine that that's subsidizing some of the (software) cost of Android phones.

    36. Re:So by bluefoxlucid · · Score: 1

      Electricity and fuel are power plant and mining labor. All of those things are essentially labor (landlords might be charging a lot for profit, although landlord profits tend to be 30%-ish and not near-100% like Georgists like to believe).

    37. Re: So by Killall+-9+Bash · · Score: 1

      so? They're not losing a billion if they increase the price $5.

      --
      "Prediction: within 10 years, Windows will be a Linux distribution." Me, 7-6-2016
    38. Re:So by Anonymous Coward · · Score: 0

      Cool. The software is free, then? Circuitry designers work for free too, right?

      An iPhone is just the parts?

    39. Re:So by hambone142 · · Score: 1

      That is correct. Googling about, one can find the labor cost estimates are less than $30.00.

    40. Re:So by Anonymous Coward · · Score: 0

      It isn't. I'm fairly sure fabrication plants employ a lot of people, the ground they sit on costs differently, and a billion other details anybody will disregard in a back-of-the-napkin claim about what should and should not be.

    41. Re:So by Anonymous Coward · · Score: 0

      The estimates are way off from my experience.. I've seen external estimates on products I've worked on and they are so far off its laughable. In Apple's case, they are using the same LCD since iPhone 6. 2+ years now! They have bought probably like 200 million 4.7" displays from JDI by now. How is it that you can make a $50 7" touchscreen tablet and sell it in China (and make a small profit) and a similarly spec'd tablet from Samsung, or Amazon, or Apple somehow has a teardown cost of "$185" from iSuppli IHS metrics or whoever and make any sense? The assembly cost and logistics costs are extremely similar to build these, so the main difference is that the quality standard is higher. But you see Amazon is selling the Fire tablet for less than $100 that most likely cost them like $60 to build. So assuming the quality standard actually is substantially higher with the non-chinese brand, it means each of the components come from higher quality manufacturers and are more expensive. So assuming the actual BOM increases from say $50 to $80, and the labor costs go up by a bit, then still, no way it should cost $185 to build that product. They are way off and have been way off for years and guess what -- everybody likes it that way. Apple doesn't want you to think that their actual BOM is like $100 and they charge $700 for the phone. Of course not. So when iSuppli puts out some crazy number like $236, nobody corrects them from the industry. I wish I knew the exact number that Apple pays per iPhone 6 and iPhone SE (their two low-end products now), because I bet it would blow the minds of people how cheap it is in reality. Definitely not $200+. I think closer to $100 is much closer to reality.

    42. Re:So by Anonymous Coward · · Score: 0

      Um, the:
      "the roasted bean shipper's labor, the roaster's labor, the green bean shipper's labor, the farmer's labor, the chemist's labor (Fertilizer, pesticide), the fuel producer's labor (farm tools, building power, roasting machines), machinist labor, oil miner's labor, power plant engineer labor, water distribution labor (municipal water supply, irrigation), logistics to move all this stuff"
      part is included in the 10c bit.
      You need to add on the costs of running the coffee shop on top of the 10c (and the profit), but getting all the consumables together to make the coffee is about 10c.

    43. Re:So by Anonymous Coward · · Score: 0

      There's a difference in what is considered "reasonable" when talking about $1.50 vs $800+. Most people don't consider $1.50 unreasonable, even if the coffee only costs $0.01 to make. Sure it is technically gouging, but it's also very easy to make your own coffee if that's unacceptable to you. Try making your own smartphone.

      You don't have to buy Apple's smartphone. I got mine for $150.

    44. Re:So by Anonymous Coward · · Score: 0

      In economics there is a distinction between cost and value. Gouging is what the buyer cries when they are confused or didn't learn this econ concept.

    45. Re:So by sit1963nz · · Score: 1

      In other, other words, how much profit in built into an iPhone anyway?

      That metric really depends on how many child laborers you can fit into each factory.

      Yes, and multiplied by the number of workers that commit suicide before receiving benefits.

      The suicide rate is actually lower than the average suicide rate in the USA. But then they don't also have people going into schools shooting children either. And before the USA gets holier than thou, they should look at how many jobs get done by children in the USA, News Paper deliveries for a start. Then they should look at their modern version of slavery, you force prisoners to work manufacturing gear for the military etc. Any one who fails to work gets solitary confinement or other punishments. This is part of the privatisation of prisons, you have corporations making money by effectively having slave labour. Then there is the whole "tipping" crap where because workers can earn tips employers can pay them $2/hr And of course there are the croppers/farmers who exploit illegal immigrants because no American will work in the sun for that kind of pay

    46. Re:So by Actually,+I+do+RTFA · · Score: 1

      If the cost to make them will "more than double" does that mean they will double the price passed on to us?

      No. Not unless the price for competing phones rise. Or Samsung phones keep blowing up.

      People who took a single course in economics and think cellphones are a perfectly competitive industry will disagree.

      --
      Your ad here. Ask me how!
    47. Re:So by Anonymous Coward · · Score: 0

      If the Apple pays for the manufacturing sweat shop in China $15 per phone for labor and that cost will double if they move it to USA. Of course they will then just increase the end price by offset multiplied by three or four, just as they do with the component upgrades.

    48. Re:So by Anonymous Coward · · Score: 0

      But if you bought beans from the supermarket, virtually all the costs that have been mentioned still have to be paid exactly the same. Yet is's still far far cheaper to make it yourself at home, is it not? Therefore any difference is just for the coffee shop's portion of the costs, and not all that other stuff.

    49. Re:So by kuzb · · Score: 1

      You're right, which is why I don't. That doesn't change the fact that Apple overcharges.

      --
      BeauHD. Worst editor since kdawson.
    50. Re:So by Lehk228 · · Score: 1

      apple isn't a monopoly. they aren't even the majority of the smartphone market, just a very profitable seller to a segment of people who are willing to pay more for a device that is harder to use and less reliable than a top tier android.

      --
      Snowden and Manning are heroes.
    51. Re:So by Anonymous Coward · · Score: 0

      I've got a simple solution. Throw labour into the free market too. No minimum wage. Labour's value is left to competency. Then we've got like-for-like trade. Jobs in the US and jobs in China. Everyone is rich and poor at the same time.

      I'm not sure how the system would handle the 'rejection' of 'inefficiencies' though.

      I'd love your input on my thought.

    52. Re:So by kaatochacha · · Score: 1

      I haven't had a kid deliver my newspaper in , oh, twenty years. It's all old guys in station wagons.
      While I agree with you on the underpayment of waiters/waitresses, they don't make $2.00/hour, they make minimum wage--which is currently $7.25 and higher in many states.

    53. Re:So by Anonymous Coward · · Score: 0

      I don't see why somebody doesn't just come along and make a better one for 250 dollars and sell it for 300 and make a killing and be the next apple right

  4. Wait... by MitchDev · · Score: 2

    If making phones "at home" means America, why aren't they paying their taxes here?

    1. Re:Wait... by laie_techie · · Score: 1

      If making phones "at home" means America, why aren't they paying their taxes here?

      Paying taxes in the US is part of the added cost of manufacturing the iPhone here.

    2. Re:Wait... by Anonymous Coward · · Score: 0

      US tax laws.

    3. Re:Wait... by Dog-Cow · · Score: 1

      They pay taxes on all income earned in the US to the IRS. Minus deductions and stuff. What the fuck does that have to do with where the phone is manufactured?

    4. Re:Wait... by slew · · Score: 1

      They pay taxes on all income earned in the US to the IRS. Minus deductions and stuff. What the fuck does that have to do with where the phone is manufactured?

      Not exactly, companies pay taxes on their profit = revenue - expenses. By "purchasing" the goods and/or the "license" to sell those goods from an offshore entity at an inflated rate, they effectively increase their expenses to hide their revenue lowering their realized USA profits and the amount of taxes they pay.

      If the "offshore" entity that made the good and/or received the licensing revenue was actually *on* USA shores, those expenses would be paid to a USA company which would show a profit and have to pay the appropriate taxes in the USA instead of the "offshore" country...

  5. Easily worth double by Anonymous Coward · · Score: 0

    I tried to add a tip to my order on apple's web site, but I couldn't! Very disappointing. ðY"

  6. Apple = greed by kuzb · · Score: 1

    Since they charge more than quadruple what it costs to make it this shouldn't be a problem.

    --
    BeauHD. Worst editor since kdawson.
  7. Don't worry by JustAnotherOldGuy · · Score: 0

    Don't worry, I'm sure mein Fuhrer Trump will force Apple to come back to the US and make those phones in 'Murica, right? If not, then Tim Cook will go to prison and Steve Jobs corpse will be exhumed and ritually desecrated, as specified in the new Alt-Constitution.

    --
    Just cruising through this digital world at 33 1/3 rpm...
    1. Re:Don't worry by Archangel+Michael · · Score: 1, Insightful

      People like you trying to sound "progressive" but you end up just sounding like a douchebag. Which I am sure works well in the Echo Chamber that allowed Hillary to lose against probably the second worst candidate ever. And when Donald Trump isn't nearly as bad as you keep saying he is, it will simply be that the smarter ones will see how stupid posts like this actually sound, and you'll lose even more. So, Keep it up.

      --
      Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
    2. Re:Don't worry by Dog-Cow · · Score: 4, Funny

      This is an Apple story. That would be the option-Constitution.

    3. Re:Don't worry by CODiNE · · Score: 1

      Moof!

      --
      Cwm, fjord-bank glyphs vext quiz
    4. Re: Don't worry by Anonymous Coward · · Score: 0

      Whooooooooosh. You should know better. You've been here long enough.

    5. Re:Don't worry by JustAnotherOldGuy · · Score: 1

      Whoooooooooooosh!

      Thanks for playing, better luck next time!

      --
      Just cruising through this digital world at 33 1/3 rpm...
    6. Re:Don't worry by mlw4428 · · Score: 1

      I think, for most of us, Trumpet is as bad as we thought. It's pretty sad when the Chinese are looking at him and going "Uh, dude, climate change is reals bro" and he's turning to Putin for a nipple to suck on while he cries himself to sleep. Look at those tiny hands, how cute!

    7. Re:Don't worry by Anonymous Coward · · Score: 0

      Aren't you a putrid little cunt. No substantive thing to say. Doubles back when called out. No reason to listen to you at all.

    8. Re:Don't worry by Some_Llama · · Score: 1

      i doubt he is trying to sound progressive, i don't think he is trying at all, sadly the left has disintegrated into this whiny pale image of the right with the same tactics (name calling, put downs, finger wagging) and it just makes them seem weak and ineffectual.

      they had the numbers and the millennials and were too up their own butts thinking they had the election in the bag to even go and vote. lol

    9. Re:Don't worry by Archangel+Michael · · Score: 1

      If your post was sarcasm, it was lost somewhere the moment I believed it. I've seen enough Leftwing bullshit to believe you meant it. If you aren't a left wing, then I apologize, and you should have put a disclaimer that it was sarcasm, and not real.

      --
      Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
    10. Re:Don't worry by Anonymous Coward · · Score: 0

      Rest assured, he already sounds silly. Really silly.

      But it doesn't change the evidence that Trump is setting out to "drain the swamp" by building a bigger and better swamp of his own, what with the flagrant conflict-of-interest scenarios (his family members in government *and* running his businesses) and the lack of transparency regarding his business dealings and taxes in the first place (first time in 40 years a presidential candidate hasn't released tax forms). Trump promised all sorts of unlikely economic scenarios like bringing back coal mining despite the collapse of world prices and somehow forcing companies to do other uneconomic things. That's okay. Empty, probably unfulfillable promises like that sound good enough to some people that it doesn't matter if he's a bigot and serial groper. As long as he's an "outsider" it also doesn't matter if his tax plan has many times the deficit that Clinton's did and hands most of the tax relief to the very wealthy.

      It looks like he's going to run the country the same way as an Atlantic City casino: gambling with tons of other people's borrowed money that he'll never have to pay back personally when it goes down the tubes. It's probably going to be a pyrrhic victory that is going to take a while before people recognize it, but I'll be impressed if Trump manages to complete his term without getting impeached in a full-blown Nixon-style abuse of power.

      Don't get me wrong. I hope that Trump isn't going to be as bad as I'm suggesting. After all, even Nixon did some good things. And it is much too early to tell for sure what will happen, but, wow, the last week does not paint an optimistic picture for a graceful transition. The guy doesn't even seem to understand what the words "blind trust" mean, or why it is so important. So, excuse me if I express some skepticism about him being able to arbitrarily convince companies to return to domestic manufacturing without any plan for how to do so other than "tariffs for everybody", which I read as "increased prices for all".

    11. Re:Don't worry by JustAnotherOldGuy · · Score: 1

      If your post was sarcasm, it was lost somewhere the moment I believed it.

      I can't help what you believe, and other people seemed to get it. :)

      But for the record:

      1) Trump will not be able to lure, convince, or force Apple to come back to the US and make those phones in 'Murica, no matter what he claims.
      2) Tim Cook is not going to prison.
      3) As far as I know, no one is going to dig up Steve Jobs body.

      --
      Just cruising through this digital world at 33 1/3 rpm...
  8. Nope, the profits will shrink 50% by Anonymous Coward · · Score: 0

    "Apple iPhone 6s Plus costs $236 to make, sells for $749" [https://www.google.ca/search?q=iphone+margin+per+unit&oq=iphone+margin+per+unit&aqs=chrome..69i57.4607j0j7&sourceid=chrome&ie=UTF-8]

    So, it will cost $500 to make and they still can have a margin of $250. The profts will shrink by 50%. I think I can live with that.

    1. Re: Nope, the profits will shrink 50% by Anonymous Coward · · Score: 0

      The comment about doubling costs was from Foxxconn. Foxxconn's Costs are the assembly of the iPhone. They don't pay for the parts or r&d or marketing. Double $20 is $40

    2. Re:Nope, the profits will shrink 50% by Streetlight · · Score: 1

      Not if you own Apple stock. You may not own it directly, but look at the stocks held in many mutual funds, and even non tech funds have it as one of its major holdings. If you have an IRA, 401k or other retirement plan with stock mutual funds, you likely own some Apple stock. Cutting Apple's profit in half (assuming all Apple's products are to be made in the USA) could have some affect on retirement income for Americans.

      --
      In a time of universal deceit, telling the truth is a revolutionary act. George Orwell
    3. Re: Nope, the profits will shrink 50% by Anonymous Coward · · Score: 0

      Good point!

  9. Apple should lead the way here by SuperKendall · · Score: 1

    Apple is in the great position of having so much money, they could spend quite a lot making this happen - but only making some phones in the U.S...

    Then they could give purchases an option - pay extra for an iPhone made in the U.S.? Apple could even be generous and split the difference with the consumer.

    The people would really have a chance to put their money where their mouth is so to speak...

    The thing is I have really mixed feelings about buying such a device. I would definitely love to support a return of manufacturing to America, but the other side of it is - do I really want to take away income from China? There are so many people so dependent on the factories there, and they have much less than Americans did to fall back on when manufacturing declined here.

    In the end I buy enough Apple accessories that I guess they would still be getting something, so I'd probably opt to pay extra for a U.S. iPhone. But I just wanted to point out that such a thing is a grayer area than it would first appear.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
    1. Re:Apple should lead the way here by Anonymous Coward · · Score: 0

      but the other side of it is - do I really want to take away income from China? There are so many people so dependent on the factories there, and they have much less than Americans did to fall back on when manufacturing declined here.

      Why worry about them? They wouldn't piss on us if we were on fire if the roles were reversed...

    2. Re:Apple should lead the way here by imgod2u · · Score: 0

      Economics is not a zero-sum game. If it made economic sense to manufacturer in the U.S. then it's not a loss for China overall as other sectors would benefit from the increased productivity.

      The problem is if you move to the U.S. for reasons that aren't economical. For instance, government mandate. In which case, productivity actually declines as you're using more resources to accomplish the same thing. More Chinese jobs would be lost while not being even matched by the same number of jobs gained in the U.S. Not to mention it'd siphon people away from existing jobs that make other goods and services cheaper for consumers.

      All of this has some elasticity built in though. So it can tolerate *some* meddling by mercantile governments.

    3. Re:Apple should lead the way here by Anonymous Coward · · Score: 0

      They bailed you out of that global financial meltdown you caused.
      And they still loan you all that money so you dont need to pay taxes.

    4. Re:Apple should lead the way here by bluefoxlucid · · Score: 1

      I would definitely love to support a return of manufacturing to America

      The only impact of which would be to increase poverty in America.

    5. Re:Apple should lead the way here by sexconker · · Score: 1

      If it made economic sense to manufacturer in the U.S. then it's not a loss for China overall as other sectors would benefit from the increased productivity.

      If it made economic sense to manufacture in China, then it's not a loss for the US overall as other sectors would benefit from the increased productivity.

      I sure love me that increased productivity in the abandoned warehouse and derelict manufacturing plant sectors!
      It's okay, bro. Lots of tarded people have normal lives now.

    6. Re:Apple should lead the way here by SuperKendall · · Score: 1

      I agree but I'm not talking about a government mandate; just Apple deciding to move some manufacturing here to help boost manufacturing capability in America because they have the excess capital to do so...

      Thinking very long term this is incredibly strategic as the closer to you you can have the means of production, the more real control you have. See: Elon Musk.

      More Chinese jobs would be lost while not being even matched by the same number of jobs gained in the U.S.

      Most of those jobs are going to be going away anyway thanks to automation though. Remembering that I would be more inclined to buy something made in America to support local manufacturing support.

      --
      "There is more worth loving than we have strength to love." - Brian Jay Stanley
    7. Re:Apple should lead the way here by phantomfive · · Score: 1

      ......what if it comes alongside automation, which actually makes production costs cheaper?

      --
      "First they came for the slanderers and i said nothing."
    8. Re:Apple should lead the way here by bluefoxlucid · · Score: 1

      Complex.

      Automating it into American factories would reduce the cost of the products. That wouldn't change the distribution of jobs--it wouldn't create new jobs (by having new workers) or eliminate jobs (by reducing total purchaseable products and concentrating American money into fewer American hands). No real advantage over Chinese manufacture unless you reduce the cost of products BELOW Chinese manufacture costs.

      On the other hand, (hundreds of?) millions of Chinese workers would become unemployed and unemployable. Mass-poverty would strike China.

      Finally, if the Chinese implemented the same automation, the reduced number of jobs required to operate the manufactories would reduce Chinese product prices below American product prices. Changing over at that time would avoid the reduced price: instead of creating more poverty, we'd avoid wealth (and thus avoid a reduction in poverty). It's still more poverty than the alternative, just not new poverty.

      It's like saying what if I cut off your hand, but gave you a prosthesis? Why not give me a way to remote-control the prosthesis and let me keep my hand? Then I would have two hands and a robot servant, instead of just a replacement hand.

    9. Re:Apple should lead the way here by phantomfive · · Score: 1

      That wouldn't change the distribution of jobs--it wouldn't create new jobs (by having new workers)

      It would create new jobs in America, right? That is, jobs that weren't in America before would now be in America.

      --
      "First they came for the slanderers and i said nothing."
    10. Re:Apple should lead the way here by bluefoxlucid · · Score: 1

      No.

      Automating it into American factories to lower the cost of products would not create new American jobs. The cost is based on a stable margin placed on top of labor.

      If you have $15.0 trillion dollars of income in America in 2016 and you pay for 171 million workers, that's great. Now make a new product, and have Americans make it, making $0.100 trillion. Great! The total income in 2016 is still $15.0 trillion; that $0.100 trillion isn't magicked out of the air, but rather paid out of income, and not paid to some other workers. Hire 3.6 million factory workers and fire 3.6 million McDonalds workers; close some fast food joints.

      If you manage to make the factories in America run at the same cost of the factories in China by reducing the labor required (automation), then you still have very few Americans working to make products, but they're paying for the same products.

      For Men and Boys's cotton trousers and shorts, we're talking about around 171,000 jobs in total. The American net job loss is 8,000 at $21/hr wage; in theory, you would have to create no more than 25,000 jobs at that rate to match price parity with the Chinese--a 7-fold increase in production efficiency over the Chinese. That is to say: gain is mediated by minimizing either wages or jobs.

      Every increase in price over what the Chinese supply decreases the number of unit goods Americans can buy. That means if you only automate to a 6-fold increase, you might need 28,500 factory workers to make as many trousers; but Americans can't afford as many trousers, and you end up with actually fewer factory workers (28,050 vs 28,100). Without as many units shipping, you also have fewer truckers, fewer cashiers, fewer inventory workers stocking shelves, and fewer retail businesses to be fed by electricity and water and building maintenance and all other business services and support--all fractional costs of the per-unit price of trousers, so those lost jobs don't suddenly free that cash up to be spent on other things.

      On the other hand, if you have an abundance of jobs (which only happens by making the product cheaper--thus an abundance in general: your money buys more things, less poverty, everyone is richer, standard-of-living goes up), you'll get population growth to fill it (Malthus). The effect actually only lasts a few years because we can grow the labor force in like 6 different ways.

      If you can make the factories 1/7 as expensive, then the Chinese can make them 1/7 as expensive as that. Instead of $14.97, you're paying $9.72 for trousers; 35% of the cost of trousers is gone; and more goods can be bought, jumping the American jobs up by 35% of what jobs support the trade market of Chinese MBCT imports (theoretically, 59,000 new American jobs). Malthusian population growth might fill that in a few years, but all those Americans will still be able to buy more stuff and, thus, we'll all be richer anyway.

      Which number was bigger: 28,000 or 59,000?

  10. So let me get this straight.... by Anonymous Coward · · Score: 5, Insightful

    Apple looks into making the phones in the US and their answer is to ask the Chinese company they're currently using, who has no interest in making them in the US, how well that would work? And surprise surprise, they came back with, "sorry, costs too much, you should keep making them here where we already have our facilities." I'm shocked, SHOCKED!

    How about investigate US-based companies? How about an investment group who might be able to put together a group who could find a way to do it more cheaply here?

    1. Re:So let me get this straight.... by LTIfox · · Score: 1

      Why would Apple ask US-based companies to investigate this? Apple does not want to make their stuff in the US - too much trouble. That's why they've asked Foxconn in the first place - they were counting on Chinese to produce some horrible numbers and Chinese happily obliged. The whole thing is just a preemptive attack on "shift production home" movement.

    2. Re:So let me get this straight.... by Anonymous Coward · · Score: 4, Interesting

      Just FYI, Foxconn operates factories in something like 14 different countries. Doesn't seem that strange to ask them to mock up a plan to set up a factory in the US. After all they do have all the manufacturing expertise for those devices, what US company even makes anything related to that sort of device to ask?

    3. Re:So let me get this straight.... by joh · · Score: 2

      The US totally lacks the industrial infrastructure for that. OK, you could import all components and build a robot factory assembling iPhone from these, but where's the difference then?

      All of this became how it is because people buy cheaper goods over more expensive ones, just as companies make their products where it's cheaper to make them. This goes all the way back to people trading foodstuff against other things, because it was cheaper this way than to make them themselves. Global trade has been used by some people to enrich themselves, but without that there would have been less competition and the rich would be even richer. Look at your ISP. Much competition? No. Good prices? No. Start a trade war and everything will go this way. You will have one or two companies making smartphones and they will rake in money while screwing you over. But of course, try it. I'm all for it. Better try and fail than always talking and never doing. Some of you people are so angry that I'm all for handing the wheel to you.

    4. Re:So let me get this straight.... by Anonymous Coward · · Score: 0

      Well, they would have to move all the CNC machines that machine their fancy cases.

    5. Re:So let me get this straight.... by Anonymous Coward · · Score: 0

      All of this became how it is because people buy cheaper goods over more expensive ones, just as companies make their products where it's cheaper to make them.

      Don't ignore the role of government.
      Sure, wages were already higher here than there, but there are lots of other employment costs that wouldn't exist if the government didn't create them by fiat.

    6. Re:So let me get this straight.... by Anonymous Coward · · Score: 1

      Foxconn is a global company based out of Taiwan. They have already looked at investing in the US and have plants in Mexico, Europe, Japan, and elsewhere. Besides if you biggest customer wants you to set up shop somewhere you don't really refuse unless you want to risk losing them as your customer. Apple could ask Foxconn about manufacturing on the moon and they'd be calling SpaceX up immediately after the conversation with Apple because Apple is so important to them.

    7. Re:So let me get this straight.... by avandesande · · Score: 0

      This is the same company who's CEO said you could fit all the US tool and die makers in one room.... last time I checked there are about 3,000 tool and die making businesses in the USA.

      --
      love is just extroverted narcissism
    8. Re:So let me get this straight.... by avandesande · · Score: 1

      OK, you could import all components and build a robot factory assembling iPhone from these, but where's the difference then?

      A job setting up and repairing robots?

      --
      love is just extroverted narcissism
    9. Re:So let me get this straight.... by D00MSlayer · · Score: 2

      Both Intel and AMD manufacture their CPU's in the US, is manufacturing a phone that much different?

      You can also probably look at this list to find others:

      https://en.wikipedia.org/wiki/...

    10. Re:So let me get this straight.... by cdrudge · · Score: 2

      Well, obviously it would be a gigantic room.

    11. Re:So let me get this straight.... by Joe_Dragon · · Score: 1

      Don't ignore the role of government.

      Yes the government needs to roll over so we have smog all over the place like china.

    12. Re:So let me get this straight.... by Anonymous Coward · · Score: 0

      There answer is to ask the company who has expertise in that area.

      Apple has not built any large scale manufacturing plants, has no idea of what the running and maintenance costs are, what the cost of powering the whole thing is, water. Then there are things like how big the car park needs to be, how big the cafeteria needs to be, how high the chemical waste volumes are, shipping logistics, etc etc etc

      ANY us company would have to convince Foxxcon to let them in through the doors so they can make assessments because there is no US manufacturing that is being done at that scale. Foxxcon employs 1.3 Million people. Boeing employs 1/10 that number.

      If Americans learned to THINK again....

    13. Re:So let me get this straight.... by phantomfive · · Score: 2

      Apple looks into making the phones in the US and their answer is to ask the Chinese company they're currently using, who has no interest in making them in the US, how well that would work?

      Foxconn is Taiwanese. They would probably be more than happy to reduce their dependence on China, which is a tenuous relationship at best.

      --
      "First they came for the slanderers and i said nothing."
    14. Re:So let me get this straight.... by gander666 · · Score: 1

      Actually, AMD spun out their fabs to create Global Foundries. Intel and GF may make wafers in their fabs in the US, but all the dicing, packaging, and final test happens in places like the Philippines and Malaysia.

      However, just making the silicon isn't really a good guide as to whether the US can manufacture smartphones. You will note from the list of fabs that virtually all the memory (DRAM, and flash) is made in China, Korea, or Taiwan, and virtually all that remains in the US is high dollar/high value logic chips, there isn't that much infrastructure to source components here. Even the manufacture of the pick-and-place machines is all in Asia now. We would have to import the equipment to stuff the circuit boards even. At best, they might be able to do final assembly in the US.

      --
      Suppose you were an idiot and suppose you were a member of Congress ... but I repeat myself. - Mark T
    15. Re:So let me get this straight.... by Orgasmatron · · Score: 2

      The difference is that when someone thinks, "Hey, I can build a component factory here, down the road from a big customer." that someone will be here instead of there - and so will be the factory and the jobs. And later, someone else will think "Since I've got all of these components being built right here, I should build my widget here too."

      That's how Detroit grew, and how it died. When it was growing, the answer to "where?" was Detroit (and Chicago, Milwaukee, Toledo, Cleveland, Eerie, Buffalo, etc). When it was dying, the answer was China.

      --
      See that "Preview" button?
    16. Re:So let me get this straight.... by Tailhook · · Score: 1

      but where's the difference then?

      You employ US citizens to build, maintain, upgrade and secure facilities, program, maintain and upgrade line hardware, transport and handle materials, inspect and QA products and you get to collect the tax revenue on the corporate entity, developed property and employee income. Plus, the work is done under our regulatory regime that doesn't involve deadening rivers and burning the cheapest fuel available in the least responsible manner with no mitigation at all.

      If you think Advanced Manufacturing is somehow people free you are naive. It's not like that at all. So even if the US worker to disposable Chinese worker ratio is 20:1 you're still talking about tens of millions of jobs. You know, the workforce we use to have and used to vote Democrat? Yeah, those people; it's funny that the very thing the D's need to recover power in the US — a loyal working class — is very the thing that makes their skin crawl for so many reasons.

      --
      Maw! Fire up the karma burner!
    17. Re:So let me get this straight.... by laird · · Score: 1

      Apple wants to manufacture in the US, has made many products in the US, and still makes some low volume products in the US, and _tried_ to manufacture the iPhone in the US. But large scale consumer electronics manufacturing is dead in the US. There aren't enough experienced line managers to hire to train and operate enough production lines that can produce tens or hundreds of millions of units a year. It's not about US salaries at all - Apple could easily cover the few dollars per unit cost of higher US wages.

    18. Re:So let me get this straight.... by gravewax · · Score: 1

      Foxconn is in many countries, they are not wedded to china, they are wedded to making a profit, if they could make their biggest customer happy and make them profitably in the US they would happily sack a couple of hundred thousand employees and move overnight.

  11. Won't cost double by Oswald+McWeany · · Score: 1

    It may cost double to make the phones in the US, but we'll just make the Chinese government buy the phones for us.

    --
    "That's the way to do it" - Punch
  12. Cost will double? by skaralic · · Score: 3, Informative

    According to this article. The $649 iPhone 7 costs around $220 to make meaning that Apple gets roughly around $400 in profit. Lets imagine that the cost does double, they will still be getting ~$200 per phone. A very healthy profit with a lot of that money staying in the US rather than China or Ireland.

    Also, the cost doubling calculation (done by Foxcon!) probably assumes that they would do things exactly the same in the US as they do in China. That is, hiring thousands of people for minimal pay to to a large part of the assembly by hand. However, if moved to the US they would probably automate more of the process and employ much less people. Think of the savings on suicide netting alone.

    1. Re:Cost will double? by JoeyRox · · Score: 3, Insightful

      Allowing external forces to decide what a healthy / acceptable profit margin can be is the surest way to destroy capital investment by businesses.

    2. Re:Cost will double? by Yvan256 · · Score: 2

      And you think machines never think of suicide?

      [Barney Stinson] Have you met Marvin? [/Barney Stinson]

    3. Re:Cost will double? by Anonymous Coward · · Score: 1

      No one gives a fuck about free market economics this year, man. We're about to build a wall across the Mexican border, do you really think the finer points of Adam Smith's invisible hand are going to persuade anyone in the next few years?

    4. Re:Cost will double? by Freischutz · · Score: 5, Insightful

      According to this article. The $649 iPhone 7 costs around $220 to make meaning that Apple gets roughly around $400 in profit.

      That assumes that Apple has $0 development costs, $0 shipping costs, $0 distribution costs, $0 marketing costs, they have $0 related to sales, $0 costs due to keeping an adequate inventory of iPhones on hand to supply distributors and of course there is $0 wastage (theft, etc.). Also, because we all know iPhones never break down, Apple has $0 costs related to returns and warranty repairs. Methinks that the your formula:

      retail price - manufacturing costs = Apples profit per iPhone sold

      ...does not quite hold water

    5. Re:Cost will double? by Anonymous Coward · · Score: 0

      Not allowing customers to decide who they are dealing with is the surest way to destroy consumer confidence in business.

      Part of that "who" includes how much profit you're taking.

    6. Re:Cost will double? by imgod2u · · Score: 3, Insightful

      Most of the cost increase will probably come from having to ship parts back and forth. A great deal of China's appeal for manufacturing is that you can get almost any custom screw, panel, molding, etc. in a day vs months in any other place. There's just so many companies there setup to be someone's supply chain and they've had multiple decades to perfect the process of turning concept into tens of millions of parts in a very very short amount of time.

      Compared to that, the labor costs are miniscule.

    7. Re:Cost will double? by Anonymous Coward · · Score: 0

      I wonder how we lived before we granted China most favored nation status in the 90's. Oh yeah, we had factories here that could produce screws, moldings and panels. Funny how those people who used to make those things are now Trump supporters.

    8. Re:Cost will double? by skaralic · · Score: 1

      Allowing external forces to decide what a healthy / acceptable profit margin can be is the surest way to destroy capital investment by businesses.

      True but no business operates in a vacuum. External forces also include the rules, as setup by governments as well as public perception about how the product you are selling them is being made.

      It would be no surprise that Foxcon is being a bit disingenuous about their assessment. The cost of manufacturing items in China will eventually to go up as the living standards of Chinese workers goes up and their labour and environmental laws tighten. This is good for everyone and should help balance the overall picture.

    9. Re:Cost will double? by Oswald+McWeany · · Score: 2

      So, if your employer were to call and say, skraralic, we notice we've been paying you $50k a year. We've decided to pay you $25k a year instead. You'll still be making a salary.

      You would think that is just and acceptable?

      --
      "That's the way to do it" - Punch
    10. Re:Cost will double? by JoeyRox · · Score: 2

      You're probably right. If we do switch to protectionist policies and the price of everything starts rising they'll all be looking for something to blame and I'm sure it wont be their own ignorance of the free market.

    11. Re:Cost will double? by bluefoxlucid · · Score: 1

      Actually, Chinese manufacture doesn't start until the Chinese companies provide consultation time with your engineers to rework your product's minor details in such a way as to maximize product quality for a given cost while minimizing cost by improving manufacture speed and reducing manufacture labor.

      Chinese manufactories regularly work closely with engineering teams to rework an engineered circuit board into the same circuit with a different physical layout, strengthening weak parts and eliminating complex manufacture steps. That means the end product doesn't fail as often and costs less to make. You also see things like what Kokoon is currently publishing about their experiences, where different materials or assemblies are selected to make a part assemble more-rapidly and prevent it from wearing out as quickly, which, again, both cuts costs and extends the product's lifetime.

      The Chinese make efficient use of both human labor and machines. They're very good at manufacturing.

    12. Re:Cost will double? by xanthines-R-yummy · · Score: 1

      Came here to say this. The linked article itself even points out it assumes $0 R&D costs!

    13. Re:Cost will double? by Rob+Riggs · · Score: 1

      I have not seen anyone talking about deciding acceptable profit margin. We are deciding whether maximizing the profits of multi-national companies at the expense of middle- and low-income American citizens is something we should continue to do. The goal of American trade agreements should be to maximize the number of American consumers who can buy an iPhone, potentially at the expense of citizens in other countries. There's plenty of evidence that we have optimized our trade agreements for the benefit of multi-nationals and at the expense of our citizens. If the president-elect can shift the balance back to our citizens and the nation as a whole, I wish him the best of luck.

      --
      the growth in cynicism and rebellion has not been without cause
    14. Re:Cost will double? by JoeyRox · · Score: 3, Interesting

      I agree that moving production overseas has hurt many workers but what about the benefit all Americans have received in terms of lower product prices? How do we balance that?

    15. Re:Cost will double? by AmiMoJo · · Score: 1

      The other issue for Apple is that they would have to repatriate the money to pay for those phones. At the moment they can just move it from Ireland too China and avoid most of the tax.

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    16. Re:Cost will double? by Orgasmatron · · Score: 2

      Amusingly enough, Trump has tossed around the idea of a 35% tarrif, which works out to $227.15 on a $649 phone.

      --
      See that "Preview" button?
    17. Re:Cost will double? by Anonymous Coward · · Score: 0

      You're not considering the ancillary costs beyond the initial purchase. Warranty support and replacements for devices that go bad within the warranty period. You get free software upgrades for many years that adds value. You can walk into an Apple Store for free support and training, or get assistance at no charge via a toll free number. And I'm sure there's more. All these costs have to be considered when determining your actual "profit" per unit sold.

    18. Re:Cost will double? by Anonymous Coward · · Score: 0

      Ah, no.

      Apple will STILL manufacture all its phones in China for the rest of the world, for a start Apple does not want to get locked out of the Asian market because it is the only one with growth. So only 1/3 of manufacturing at best will come back to the USA.

      If Apple keeps the price the same, manufacturing will cost a lot more plus the cost of the factory will need writing off etc etc etc so I really doubt that the IRS will see any increase in taxes, they may even see a reduction. It may even be that "Apple USA" will 'licence' the iPhone brand name from "Apple International", further reducing their taxes.

      Never mind that even if Apple were to start today, it could be up to 8-10 years before an iPhone rolls off the plants in the USA. Sure Apple and everyone else will go through the motions, but the will go as slowly as possible knowing at worse Trump is gone in 8 years, and the Mid Term elections are only in 2 years, those same pissed off voters may just feel vindictive when no actual jobs have come back to the US, without even thinking why, and in the mean time the trade war with China has actually made their lives WORSE.

    19. Re:Cost will double? by Anonymous Coward · · Score: 0

      Do you know what it costs to run a retail chain? I'm guessing not.

      There are a lot of costs involved in shipping, advertising, talking to customers, selling and servicing the devices. Collectively these costs are called "marketing", and they're - depending on industry - typically something between 20 and 50% of the total retail price. For a business like Apple, whose marketing and service is a huge part of what they do, I would expect the number is towards the top of that range.

      So if the retail price is $649, the manufacturing division would "only" see, at most, about $300 of that. This "$400 profit" is a fantasy figure that appeals to engineers because it ignores everything that isn't engineering.

    20. Re:Cost will double? by Anonymous Coward · · Score: 0

      Until you remove R&D costs, marketing costs, share holder payments, etc etc etc so suddenly that $200 gets very close to $0

      The ONLY phone maker who is going to make a PROFIT from cellphones this year will be Apple, and even if Samsung had not had a bad year Apple would have made 85% of the profits. ALL the other manufacturers are running at a loss.

    21. Re:Cost will double? by Anonymous Coward · · Score: 0

      Or $0 if you go across the Canadian Boarder and buy one there.

      Can you see all the Russian Spam..."Canadian iPhone, with free penis enlarger if you also buy 2 bottles of Viagra"

    22. Re:Cost will double? by Kernel+Kurtz · · Score: 1

      You're probably right. If we do switch to protectionist policies and the price of everything starts rising they'll all be looking for something to blame and I'm sure it wont be their own ignorance of the free market.

      This. Tariffs will only lead to inflation. I always use toasters as an example, but any low margin good is the same.

      You can buy a Made in China toaster for $20. It costs $30 to make one in the USA. How do you bring toaster manufacturers back? You put a $20 tariff on Chinese toasters. Now the Chinese made one costs $40, so everyone will buy the cheaper US made one and voila, you have toaster factories and jobs!

      The bigger picture of course is that Americans now pay $30 for toasters that the rest of the world only pays $20 for, and everyone else continues to buy the $20 Chinese ones so you still have no export market. Maybe does not seem like such a good plan anymore.......

  13. Third-world neighbor. by Anonymous Coward · · Score: 0

    How about Mexico?

  14. labor to build by Anonymous Coward · · Score: 0

    I was a manufacturing engineering in electronics.
    I had to bring my daughter's iphone to store to get the screen replaced.
    I watched the tech disassemble then reassemble the iphone.
    I was SHOCKED at the amount of hand labor required to assemble.
    A good 10 minutes and this guy was flying. (and no ESD mats).
    Now I'm not saying Apple doesn't know how to design for manufacturability.
    I'm saying they must have traded size design constraints against labor to assemble.
    Nevertheless it is a labor intensive device to assemble. With plenty of opportunities to make mistakes.

  15. But everyone will make more money by Anonymous Coward · · Score: 0

    It'll be like Fords employees buying his cars.

  16. profit margins, and protectionism by Anonymous Coward · · Score: 0

    Apple's phone profit margin is about 40%.. So, they cannot absorb a doubling of the production cost without selling the phones at a loss.

    This mean costs to consumers will go up. (They may go up even if Apple could in theory absorb the cost). This is why protectionism hurts: you bring back a few hundred factory jobs, but in exchange tens of millions of people are in effect poorer because they now have to pay more for their iPhones, meaning they have less to spend on other things, decreasing their effective wealth. The net social cost of doing this is drastically higher than the benefit of having the few factory jobs, because it impacts so many more people.

    1. Re:profit margins, and protectionism by r1348 · · Score: 2

      Exploiting foreign underpaid workforce is, instead, perfectly acceptable.

    2. Re:profit margins, and protectionism by JoeyRox · · Score: 0

      What's exploitative about paying a foreign workforce the prevailing wage in their country?

    3. Re:profit margins, and protectionism by Jack9 · · Score: 1

      > Apple's phone profit margin is about 40%. [nytimes.com]. So, they cannot absorb a doubling of the production cost without selling the phones at a loss.

      Running at a margin below a target margin, does not make it a loss.

      --

      Often wrong but never in doubt.
      I am Jack9.
      Everyone knows me.
    4. Re:profit margins, and protectionism by Anonymous Coward · · Score: 0

      Doubling the production cost CAN mean selling at a loss depending on the other non-production costs involved in making that phone, which is a number not given in the reference. But it's easily possible.

      In any case, Apple is highly unlikely to keep selling the phones for the same cost if a $225 component of the phone's cost to Apple should double.

    5. Re:profit margins, and protectionism by bluefoxlucid · · Score: 1

      He thinks it's a low number and prefers mass-unemploment and starvation to a moral dilemma.

    6. Re:profit margins, and protectionism by Anonymous Coward · · Score: 0

      Capitalism is exploitation, period. Every dollar a company makes in profit is one dollar they could have paid to employees or reduced the cost of their goods by. You've just been brainwashed into thinking Capitalism is something great and noble.

    7. Re:profit margins, and protectionism by r1348 · · Score: 1

      Ask yourself why those wages are so low.

    8. Re:profit margins, and protectionism by r1348 · · Score: 1

      What I think is not up to you to state, Or even guess.
      I just prefer a fair redistribution of wealth. Right now much of the world's wealth is removed from active economy by few super-rich, who use it to either gamble in the financial markets, or simply sit on it like freakin' Smaug, On the other end, those who produce the products or services where the wealth comes from are denied the right to a dignified life.

    9. Re:profit margins, and protectionism by JoeyRox · · Score: 1

      Their wages are so low because the prevailing cost of living in those countries is lower, which is the result of a variety of factors, some benign, some less so (like less pollution and worker safety controls). As more and more people are put to work in higher-value jobs (manufacturing would be considered higher value to them since most are working in agriculture and trade fields), the standard of living and wage levels will rise commensurately.

    10. Re:profit margins, and protectionism by r1348 · · Score: 1

      The picture you paint is a bit too rosy, to say the least.
      Wages are low because there's a different definition on what constitutes "minimum living standard". It's true that generally speaking industrialization leads to class awareness, and subsequent social strife. That's how it worked in the Western world. However production is now mostly in countries with authoritarian regimes which don't see well things like unions, strikes and salary demands. Those countries already attract foreign corporations by offering tax-free zones that won't enforce the already poor local regulations, if wages were to rise too much, corporations would just move production elsewhere, because if there's something that is never in short supply, is exploitable poor masses.
      The only way to effectively contrast this phenomenon is to build trade barriers between countries with too big wage gap. Because remember: Apple cannot survive without selling iPhones in the US.

    11. Re:profit margins, and protectionism by JoeyRox · · Score: 1

      We live in an imperfect world and no economic system is without its warts but history has demonstrated that the liberation of trade from free markets leads to rising standards of living and greater freedoms. The progress isn't always linear and there will be lots of fraud and inequities along the way but unless someone devises a better system I don't see what the alternative is.

    12. Re:profit margins, and protectionism by bluefoxlucid · · Score: 1

      Uh. Wealth is essentially production, and is reflected by the buying power of income. A person's wealth is their buying-power income per time (e.g. annual income as a purchasing-power parity).

      There aren't very many "Super-rich". The big CEOs and CFOs making millions aren't actually doing much damage, or at least not much in context.

      For example, an earlier CFO of Ford Motors was taking about a $40 million total compensation package; $8 million of that is cash salary, bonuses, and dividends, while the rest is stock or stock options. Stock and stock options come from the secondary security market, devaluing the stocks investors hold; cash salary, bonuses, and dividends come from revenues, just like worker wages.

      If you broke up that $8 million among Ford's employees, it'd be $53 per employee per year; $4.44/month; $2.05 per 2-week pay check; just over a dollar per week; or 2.7 cents per hour. Even with a dozen executives, you're still talking about 32 cents per employee per hour, or $640/year.

      Stock options don't get taxed until exercised; stock issuance, exercised stock options, dividends, cash bonuses, and salary all get taxed by the IRS as immediate income. The gains made on stocks are further taxed as income if sold in the first year, or as capital gains (15%) if sold thereafter. Reinvested dividends are taxed as cash; when the stock is sold, the difference between its purchase price by dividend reinvestment and its current price at sale is taxed at the appropriate rate.

      You still have people like Warren Buffet floating around, but not many. Their scope is limited because their actual income is limited: they may hoard tons of cash, but that cash has no real impact on the economy. Cash that's idle in bank accounts allows the banks to loan money; but that cash itself doesn't participate in the economy, and has exactly as much impact otherwise as all the billions and billions of dollars you might imagine Scrooge McDuck could have hoarded away if he were real.

      Warren Buffet gets a lot of attention. He has a total net worth of $66 billion, but people like to say he earns $13.4 billion in a year. This is inconsistent; the truth is he holds $66 billion of Berkshire Hathaway stock, and a swing in that stock by a few percent can shove his current net worth up by billions. His actual income is mostly dividends... $62 million of dividends per year. That's actually $187 per Berkshire employee per year.

      So Warren and Michael can't make much of a difference to anyone. When you get to Chipotle, their CEO is actually making $33.72 per employee per year; I miscalculated this at $3,600 before, which was hilariously off.

      So yeah, long and short of it is none of these people have any significant or actionable impact on the economy. The money they're sitting on... they could spend it, and they'd cause inflation, but not a sustained increase in demand (so not more permanent jobs). You might see a job spike for a few years, an inflation crisis, and then an unemployment crisis.

      Try again?

    13. Re:profit margins, and protectionism by r1348 · · Score: 2

      Except history demonstrated the opposite. Most of the socio-economical conquests of the working class happened in the 20th century well before the Reagan/Thatcher era that imposed ultra-liberism as worldwide dominant doctrine. The fact that corporations could not move production elsewhere at whim, but were forced to keep it where the goods were consumed, was actually a major contributing factor to the success of these struggles. Once international free-trade deals took place, a slow but constant erosion of the working class rights started. To the point where blue-collar America ends up voting Trump (misguided, I agree, but they do have a point in supporting protectionism).

    14. Re:profit margins, and protectionism by JoeyRox · · Score: 1

      Depends on which aspects of history you choose to correlate to which outcomes. It's very easy to pick and choose data points. As for the corrosion of the working class post-Reagan/Thatcher - tell that to Asia and China and see if they agree. What Americans consider the corrosion of their working class is really just the equalization of the standard of living between the West and East.

    15. Re:profit margins, and protectionism by tbannist · · Score: 1

      It can, but it doesn't in that case:

      40% of $649 is $259.60 which is more than $225. Mind you, I don't expect Apple to go from $259.60 per phone in profit to $34.60, either.

      But I'm not sure if the doubling production costs is reasonable, that implies that labour costs would be more than double in the U.S. and Apple has repeatedly said it wasn't outsourcing to China because the labour was cheaper...

      --
      Fanatically anti-fanatical
    16. Re:profit margins, and protectionism by r1348 · · Score: 1

      Well, once a Western worker is put in direct competition with someone willing to do his job at 1/10th of the salary, worker's rights are the first thing to compromise on. That is, if he's not just "reorganized" out of employment. Because yes, rights are expensive. Only a relatively wealthy society can afford them, one that has a meaningful redistribution of such wealth.
      The paragon you make with Asia is not entirely valid. In the '80s Asia was still a mostly rural society (apart from the Soviet block), the increase of living standards they saw was due to industrialization's more efficient production of wealth. Also, don't confuse rights with wealth. It's true that there's some sort of equalization of wealth between the West and East, but is it also true for worker's rights? See the point I made about authoritarian regimes.

    17. Re:profit margins, and protectionism by r1348 · · Score: 1

      So, let me get this straight. You start by saying that wealth is essentially production, but then you have people like Warren Buffet whose wealth comes entirely from stock options and dividends, therefore not production (at least, not his own).
      Again, you claim that by spending it all, it would only cause inflation, and no sustainable increase in demand. I agree. You know what would though? A $640/year raise to all Ford workers (that not including all dividends that Ford pays to shareholders, which I'm not able to quantify right now). Because that's money that won't sit in bank accounts, but will re-enter economy almost immediately. Of course, that won't cause an immediate increase in market demand, but a slow, but sustainable growth driven by diffuse consumes in the long term.

    18. Re:profit margins, and protectionism by laird · · Score: 1

      Production cost is not the entire cost of the phone, just the cost of the assembly. That's about $10 per phone, because Apple's manufacturing is highly automated - people just do the steps that humans are better than computers at. Adding $10 to the cost of the phone isn't going to kill anyone.

    19. Re:profit margins, and protectionism by bluefoxlucid · · Score: 1

      then you have people like Warren Buffet whose wealth comes entirely from stock options and dividends, therefore not production (at least, not his own).

      Warren Buffet's income comes from stock options and dividends. Things don't have actual value; the fact that you work doesn't mean your work is worth what we pay you, just that we imagine it so. Buffet "works" in some capacity, and he gets "paid" a shitload.

      Wealth, on the other hand, is more-complex. America is a wealthy nation: 2% of our labor works on the farm, and some 10%-ish goes into actually making and shipping food--including the chemists and GMO engineers, the shipping trucks, and the grocery stores. Mexico used 18% last I looked, but they might have caught up; India made great strides between 1992 and 2003, eliminating literally 98% of the labor required to make food; and some poor African bush countries expend more than half their labor simply obtaining food.

      In America, we don't work hard to get food; food represents a tiny share of our labor, and we work hard to have a huge pile of money from which we cut the tiniest sliver and hand it to the people making our food. When 1 hour of your work represents food for 50 people, their 2% of their income fills 100% of yours; of course, they spend 12% of their income, and 1/6 of that gets to you, so you're in the same boat as everyone else. (In reality, there's wage inequality, so the farmer could be richer or poorer; the 12% number is what the median household spends out of their income on food.)

      You know what would though? A $640/year raise to all Ford workers [...]. Because that's money that won't sit in bank accounts, but will re-enter economy almost immediately.

      Yes, to a degree. To the individual, it's still under $25/paycheck, which isn't going to solve poverty any time soon. There are more-complex considerations here, though. Let's assume you mean that the money is taken away from the executives, and is only money that was getting sidelined and not spent; if the executives were spending it, none of the below is true.

      What you describe is almost a change between cost of employment and take-home. I've described economic policies where we reduce the cost of employment, such that an employee takes home more of the money an employer pays. So today an employer may pay a $62,200 for a $50,000 employee, who takes home $42,100/year; if that employer paid $59,000 and the employee took home $45,000/year--and all employment costs experienced this change--then the employee's buying power would increase because the ratio of labor-cost to wage-income would be lower. That means the employee can buy more stuff.

      The bluntest consideration is the total combined effect. Assuming all 171 million U.S. workers got a $640/year raise, that's $110 billion, or up to 6.6 million minimum-wage, full-time jobs suffused by people hitting up McDonalds 3 times more each month. It's an important, short-term consideration.

      I've used that argument before, and it's actually cut off quickly--in just a few years, actually. Malthusian population growth provides a prototype theory: population expands in abundance, and stops expanding when abundance ends. Essentially, our labor force grows when unemployment is low, and shrinks when it's high. This happens in the long-term by birth rates; in the short-term, people retire earlier or later, more poor people die when there's more unemployment, immigration slows with fewer employment opportunities, and some people even stay in college longer. The short-term effect of losing jobs is something I argue more about, because people want to pretend a minimum-wage increase doesn't mean someone becomes unemployed until either wages fall behind inflation or the labor force falls behind population growth; I don't like distortions of reality.

      These two things are actually part of a side-goal of my Universal Social Security plan. That plan ultimately provides

  17. Focus on automated assembly by moorley · · Score: 1

    With all their design skills they haven't made a 90% or higher an automated assembly process yet? I wonder if they could send it as a kit you assemble... ;-)

    I have a feeling the first manufacturing they ever bring back will be an automated factory. I could jest but it would be understandable if it's a satellite facilitating managed mostly remote from their existing facilities whenever that time comes...

    --
    "Don't fear death... fear not living..." -me :)
    1. Re:Focus on automated assembly by freeze128 · · Score: 1

      Why spend capital on automation when you literally have A BILLION HUMANS that work for pennies.

    2. Re:Focus on automated assembly by Sebby · · Score: 1

      I wonder if they could send it as a kit you assemble... ;-)

      Not a bad idea. That was done in the 80's with the ZX81 computer

      --

      AC comments get piped to /dev/null
    3. Re:Focus on automated assembly by BasilBrush · · Score: 2

      Your stereotypes are way out of date.

      "The average factory worker in China earns $27.50 per day, compared with $8.60 in Indonesia and $6.70 in Vietnam. "
      http://www.economist.com/news/...

    4. Re:Focus on automated assembly by jellomizer · · Score: 2

      In short that will happen. This double price if made in America is based if they make the phones in America the same way they do in China.

      The low skill manufacturing job is going to go out the window, no matter how much the low skill laborers complain and have political pressure. Because It comes down to simple business. Hire 20 people at 100k a year and invest 50 million in automation that can be depreciated over 20 years. vs hiring
      100 people to work the line at 50k for 20 years.

      It is more economical to pay more of the skilled labor with automation vs. Lower waged workers to do the grunt work.

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    5. Re:Focus on automated assembly by Anonymous Coward · · Score: 0

      Right, which works out to 2,750, 860, and 670 pennies respectively, which is a hell of a lot less than the 16,000 pennies (on the low end) that an American would likely make.

    6. Re:Focus on automated assembly by laird · · Score: 1

      Apple's manufacturing lines are highly automated. People only do the parts that people are better at than robots. Last time I saw the number (a few generations back) human hands only touched the iPhone for a few minutes per phone. The rest is all robots - placing chips on PCB's, flow soldering, most of the assembly, etc., is automatic.

  18. Total automation. by Gravis+Zero · · Score: 1

    If they switch to total automation, the investment cost will be high but ultimately the cost will decline to there mere cost of maintenance. Having people in the US doing the machine maintenance will still result in more money in the US economy.

    --
    Anons need not reply. Questions end with a question mark.
    1. Re:Total automation. by kdubb1 · · Score: 1

      Wow. Have you ran this totally non-obvious idea by Apple? Maybe you can use it as your shoe in to managing their manufacturing team. I'd throw a proposal together and get in front of them right away!

      Apologies for the sarcasm but clearly Apple is doing all they can using automation. If you follow this stuff at all you'll know they are constantly investing in automation. Unfortunately there are thousands of things too dextrous for a machine to do. When your workforce is counted in the millions I can't imagine a scenario where this isn't the first priority on your agenda.

      Also, there is a serious problem with task specificity. These machines take months to design and program; in the fastest of situations. Then you have to manufacture 100,000 of them. Investing that amount of time and energy in a specialized machine that can do a single job for the iPhone 7 but won't be needed for the iPhone 8 makes many of the tasks a machine *could* unreasonably costly and time consuming.

    2. Re:Total automation. by Marsoupial · · Score: 1

      That all sounds way too complicated. Why not just get robots to do it?

    3. Re:Total automation. by bluefoxlucid · · Score: 1

      Automation requires fuel and maintenance. The machines to build things can be complex, and have to be retooled when things change. The flexibility of a machine for retooling affects its cost of ownership; and its rate of manufacture affects how many such machines you need so as to produce things at a certain rate.

      If you need 1 machine to produce 1,000,000 things per year, then retooling after the design changes in a year costs what it costs to retool 1 machine. If that machine is slow and produces 1,000 things per year, you need 1,000 such machines, and the retooling cost is 1,000 times as high. Likewise, all of those machines need maintenance; and machines performing complex assembly require more maintenance to keep reasonable tolerance so as to produce correct products. This requires both machinists and inspectors to look at the machines constantly and identify if they're out of tolerance; in a steel pressing facility making sheet metal, you can have an inspector test a roller for tolerance as frequently as once every half hour.

      Slower machines also require more fuel, because they have a base load just to operate.

      In the end, you have all these costs besides initial investment, and they're all variable based on what kind of technology you get. The little deficiencies multiply together, and they're sensitive to market forces. Humans have zero retooling costs for vaguely-similar work, while machines have to be retooled to assemble the same components on a different bike frame.

      Machines essentially have a wage; it's just paid out to all the humans involved in keeping the machine doing its job.

    4. Re:Total automation. by Anonymous Coward · · Score: 0

      right until you get to the point where a new model is produced, or a design defect is found and later versions of that same model are different.

      Designing, constructing and setting up a manufacturing plant that can make something complex like the iPhone, and making a MILLION OF THEM A DAY is not a cheap simple task, having to change its function is also not a cheap simple task.

      China is already automating all the jobs it can.
      "On 25 May 2016, the BBC reported that Foxconn fired 60,000 employees because it had automated "many of the manufacturing tasks associated with our operations"

      And making a Million iPhones in a fully automated factory is NOT creating jobs (which is effectively what Trump has promised).

      The there are all the other costs, Does a new power plant need to be built, or do you fire up one of the old pollution coal plants. What about the power lines, roads, water, waste, who is going to pay for all of this ?
      How long do you think setting up in the USA will take, its not instant, its not even going to be 5 years, and even if Trump gets elected to a 2nd term, he will NOT be president by the time the first phone rolls out the door.

      And Trump knew this, he knew he was making promises that no one could ever keep, and he knew the voters were too stupid and too lazy to look at it, think about it and work out the truth, he CAN"T bring any of it back. Worse he KNOWS that if he tries, EVERYONE will be on the go slow, slow to find suitable land, slow to design the factory, slow to get consents, so that in 4 years time when Trump is voted out these companies will have wasted as little money as they can while continuing on as per normal. And Trump KNOWS this, doesn't actually care, but the bullshit got him elected didn't it.
      He may even find that when the mid terms comes around he will not have control over the senate etc, so that can blame everyone else over the failure of his promises.

      Fact is,
      A trade war with China will hurt the USA MORE because it is reliant on their manufacturing.
      The USA is 4% off the worlds population
      The USA is 20% (and falling) of the worlds GDP
      The USA is a saturated market, Asia is where all the consumer growth is, does the US want to be locked out of that ?
      China will become the worlds biggest economy while Trump is in office, he can't stop it. The 96% who are not in the US will still trade with China
      The US markets are heavily subsidised and protected already, it is very difficult to trade in the USA, the rest of the world will simply put more effort into bilateral trade with other countries, this will be to the detriment of the US.
      The USA is NOT the leader the the free world, sure thats what you label yourselves as, the rest of the world just ignores that and carries on.
      The World does not revolve around the USA.
      Any trade war will see all other US interests made more difficult because trading relationships will be tougher, it is likely that China will benefit and get access to resources in preference because of the better trading relationships.

    5. Re:Total automation. by Gravis+Zero · · Score: 1

      Automation requires fuel and maintenance. The machines to build things can be complex, and have to be retooled when things change.

      A) They require electricity, not fuel. (fuel is chemical)
      B) Retooling is now something that can be done fairly quickly if they invest in a SLM machine to make parts on-site and it's not like they are short on cash. Yes, this does mean they would need to design parts for the machines that make their iPhones.

      Machines essentially have a wage; it's just paid out to all the humans involved in keeping the machine doing its job.

      naturally and that cost is much lower than humans... unless you own virtual/actual slaves.

      --
      Anons need not reply. Questions end with a question mark.
    6. Re:Total automation. by Anonymous Coward · · Score: 0

      Worse, you will NOT be making 1 Million iPhones a day.

      Everyone keeps assuming that 100% of the iPhones will be made in the USA, and they are ALL WRONG.

      At best the iPhones for the US market will be made in the USA, about 1/3 of them will be. And this will be trues for other major corporates, only the US products will be made in the USA, the rest of the world will still have their goods made in Asia and they will cost less.

      Why do you think the MacPro has not been updated, it iOS made in the USA, the volumes sold simply don't warrant the cost of the changes required for a new model. THAT is what a trade war with China will bring, stagnation, because the costs of change in the US will take too long to pay off, so old stale products will keep being made

    7. Re:Total automation. by bluefoxlucid · · Score: 1

      Electricity is a power source. Perhaps I should have said energy. Electricity is generally generated from fuel; but geothermal, wind, and solar are ostensibly different (granted, wind and solar are technically generated by solar nuclear fusion; and geothermal is generated by a magnetic field interaction causing friction, ultimately powered by solar nuclear fusion).

      You say "short on cash" as if money means something. Money is a representation of labor. If you get paid $20/hr and I get paid $10/hr, you are able to use 1 hour of your time to buy 2 hours of mine. Things are made by a combination of fractional human labor time from many workers, and the minimum viable price is what pays the wages (really, to include cost of risks, which incur other labor and thus wages).

      Machine cost is not lower than humans in all cases. Designing, building, maintaining, and powering a machine can actually cost more than just using humans. We could make a machine to form carbon fiber parts today, but it would be much slower than humans, and would require maintenance cycles and power such that the human labor to keep the machine running would exceed the fewer hours of human labor to do it all by hand; because of the complexity of properly-tooling for new carbon fiber parts, human labor is orders of magnitude more efficient than machine labor.

      Machines doing everything from top to bottom and being automatically-cheaper than human labor is a Marxist fantasy. It doesn't actually work that way. The ideal is perpetuated by people who aren't engineers, but assume engineers are fully-capable of making new technology by willing it into existence on the spot, and that our overlords simply want power over other humans. Largely, the entire view is the same form of magical thinking as spiritual healing using the vibrational energy of crystals to tap the power of nature.

      Also, slaves aren't cheap. To make a slave, you must first build a non-useful human for a decade or so. Child labor is inefficient, and child slave labor can help reclaim some of the cost of raising a slave; adult slave labor is much more efficient. After 12-15 years of wasting your resources, you've built a slave. Slaves require continuous maintenance to remain efficient: they must be fed, given medical care, housed, and otherwise tended to the bare minimum to make their labor effective. For manual labor slaves, they're little more than beasts of burden, and only need functional bodies enough to push and pull and lift things; more-complex tasks require slaves who are both obedient and competent. Sickness and injury are risks which can reduce the effectiveness of slaves permanently, and can't be repaired; replacement is, of course, expensive due to the food and care needs for a decade or so with no return.

      The next step up from slavery is a free labor society. Free laborers work for an incentive--money, most familiarly, to represent their labor time (or exert pressure on others's labor time--that $20/hr vs $10/hr thing). Free laborers work to obtain the means to raise new laborers, which means that they provide labor (thus paying) for those costs involved in slaves. This diffuses the cost of producing a new laborer through the economy, whereas slavery places that cost onto the slave owner.

      Free labor societies eventually develop enough wealth (via technical progress) to supply welfare. Technical progress reduces the labor required to make things, eventually diminishing the cost of stronger welfare systems to make them viable and even cheaper than old ones. Eventually, things like public healthcare and universal basic incomes (e.g. universal social security) become more-effective than food stamps or poor houses. This not only further diffuses the cost of raising a new free laborer across society, but also improves the health of the poor and, thus, reduces the rate of sickness and death among free laborers (mostly the poor). That reduction actually reduces the total labor in society invested in producing new l

    8. Re:Total automation. by Gravis+Zero · · Score: 1

      Money is a representation of labor.

      Incorrect. If that were true then the most laborious jobs would pay the most.

      The rest of it... well, if you can't be concise, it's not really a point worth making.

      --
      Anons need not reply. Questions end with a question mark.
    9. Re:Total automation. by bluefoxlucid · · Score: 1

      Labor is time, not effort. You have 24 hours in a day; you must sleep for 8 of them; and what of your time to enjoy products you purchase?

      We increase wealth through technical progress, which reduces the amount of labor required to make things. 100 people making $10/hr produce 500 bowls in an hour; that bowl has to cost at least $2 per each. You find a way to have 100 people produce 1,000 bowls per hour, you can sell those bowls for $1 per each; yet those people are still making $10 per hour. They're buying half as much labor in each bowl.

      Less time here is put in per each bowl; and a person's time--that same 1 hour--buys 10 bowls instead of 5. That person is being paid more (still $10/hr, though; we've just discovered deflation!).

      Now, of course, if we don't sell any more bowls, we fire 50 of these people, and employ 50 people making 500 bowls per hour. Since consumers were collectively spending $1,000/hr on bowls and are now spending $500/hr to buy only the same bowls, they have $500/hr of unspent money. Now they buy plates--which we can make by employing 50 people making $10/hr to produce 500 plates per hour.

      Now, again, we have 100 people employed, $10 paid per hour of each's employment, and $1,000 consumer dollars spent per hour on the goods they produce; yet before they only produced 500 bowls per hour, and now they produce 500 bowls plus 500 plates per hour, at the same cost.

      That's technical progress.

      You might notice these laborers make $10/hr, and purchase either bowls for 1/5 of an hour's time OR bowls for 1/10 of an hour's time plus plates for 1/10 of an hour's time. Both cases involve spending 1/10 of an hour's wages to buy 1/10 of an hour's time.

      You might also observe that I might make $20/hr, and so I will expend 1/10 of an hour of my time to extract 2/10 of an hour of those laborers's time from them. Likewise, for them to buy my product, they will have to work 2 hours so as to extract 1 hour of my time.

      What do you think money is, really? It's labor. Money pays for the time you spend laboring. Maybe you work hard and we pay you shit, while I recline in an air-conditioned office and get paid 3 times as much; I simply call that "Tuesday", and then give you a dollar fifty to make me a hamburger.

      The rest of it... well, if you can't be concise, it's not really a point worth making.

      Peter Klauser described American idealism: "1. Ignorance is innocence; complicated explanations are suspect; The world is simple, and there must be a simple explanation for everything."

      The concise explanation of economics is that nearly-everything in economics violates common sense. If you don't have time to sort through long, complicated explanations of interconnected systems which produce unexpected results, you're best keeping your mouth shut. If you want me to be brief, then you need to stop asking questions and assume everything I say is 100% correct; and a lot of it is going to sound very wrong without a large and thorough explanation.

      People's expectations of short and simple economics leads to backwards beliefs like that raising minimum wage creates jobs because there is more money and every $1 gets spent 6 times over and makes the economy go. The bare and simple fact is minimum wage raises keep that minimum wage up with inflation, which is important when your wage system is built on a minimum wage; and every discrete increase reduces the buying-power of a dollar and concentrates money into fewer hands--and creates unemployment, making some minimum-wage earners poorer while making most richer.

      You expect to learn all there is to know in life from a simple scrawling on the back of an index card. In short: you are a fool.

  19. Right now by Anonymous Coward · · Score: 0

    I wouldn't buy an iPhone if you paid me. If apple builds them in the US I might pay double just because I'm actually helping my own economy.

    1. Re:Right now by laird · · Score: 1

      The profit on the iPhone does flow into the US economy. And, of course, they do all the engineering, and most of the marketing, etc., in the US. When you buy an iPhone that's where much of the money goes.

  20. Labor expenses are a tiny part of total cost by Tactical+Bacon · · Score: 1

    I've read that the labor costs involved in building an iPhone are roughly betweeen $12.50 and $30 per unit. (http://nextshark.com/real-cost-of-iphone/) I suspect Apple can afford to absorb that extra expense or pass it on to the consumer without a huge loss in sales if those figures are accurate.

    1. Re:Labor expenses are a tiny part of total cost by imgod2u · · Score: 4, Insightful

      The thing about moving it to the US isn't about labor cost. It's about the loss of the giant manufacturing supply chain that only exists in China.

      If you want to make *anything* here in the U.S. you either wait months for some mom-and-pop shop to custom-make a mold or glass panel for you. Or you call up a Chinese manufacturer, send them a drawing and have 100k parts ready in about 2 days.

      Just getting a printed-circuit board made in the U.S. costs ~20k for some PCB contractor and around 2 weeks for a prototype. There are shops in China you can send a schematic to that can send you 100k boards ready for production in 2 weeks for ~5-10k. Hell, if you want they can even take it the rest of the way and assemble the entire product for you.

      You won't find *any* place in the U.S. to do that for you. Even if you're willing to pay money for it.

    2. Re:Labor expenses are a tiny part of total cost by kdubb1 · · Score: 1

      It's the supply chain. Nearly all of the parts to make these electronics are created in the Asia-Pacific. In many cases that's all the way down to the raw materials being dug out of the ground. The fact is that these things are assembled there because it's immensely cost effective before labor even enters the equation.

      Right now only 200 million or so finished iPhones make their way across the Pacific ocean each year. Switching to transporting each individual component, just so an American can assemble them, creates a huge increase in shipping costs and time. Imagine the separate shipments required for the hundreds of separate parts that make up a single iPhone. If you're making 100,000 at a time, that's 100,000 processors, 100,000 displays, 100,000 batteries, etc; now multiply that by 2000 to get to your 200 million total. Now put each of batches of components on a carrier ship and have it make it's way across the ocean. Each neatly wrapped separately to keep it safe until assembly. That is a giant amount of needless waste in shipping cost and time.

      What if you want to be "green", as well as save money, and reuse all the packaging materials for your 2000 or so batches. Well put all that on a ship and send it all the way back to Asia.

      All so Americans can have the pleasure of doing one of the most boring jobs available to humanity.

    3. Re:Labor expenses are a tiny part of total cost by Tailhook · · Score: 2

      I've read that the labor costs involved in building an iPhone are roughly between $12.50 and $30 per unit.

      When you're employing disposable Asian workers with no rights or protections labor costs are low. When you don't have to employ teams of environmental compliance experts and sexual harassment lawyers and all sorts of other people to comply with the realities in the US it costs a lot less.

      This whole story is suspect; Foxconn is not impartial here. That huge outfit is wedded to the Chinese government and the Chinese government doesn't want any change in the current pattern of evacuating the Western industrial base to China. So Apple asks this foreign manufacturer to calculate the cost of a domestic alternative and — big surprise — the foreign manufacturer concludes the cost is infeasibly high... Yeah. Whatever. They may be right but they aren't credible.

      The story is so thin it's hard to see; no analysis, no breakdown of how they computed anything. Just an unsupported press release. So it's just a trial balloon being floated by Apple+Foxconn. Propaganda in other words. Yet here it is, ricocheting around the liberal echo chamber as unassailable fact; "see look Trump stupid herp derp."

      --
      Maw! Fire up the karma burner!
    4. Re:Labor expenses are a tiny part of total cost by HornWumpus · · Score: 1

      You exaggerate.

      Even for the biggest customer you can't make CNC machines run at infinite speed. Heat treatment takes time. EDM is not instant. Polishing can take 2 days alone.

      There is also another side to that mythical 2 day turnaround. The other client that got their incomplete mold repurposed and parts run aborted so that Apple could get a 2 day toolup and prototype run. It's all great if you assume you will be the Apple player, kind of sucks for the other guy though.

      --
      John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
    5. Re:Labor expenses are a tiny part of total cost by Anonymous Coward · · Score: 0

      I've read that the labor costs involved in building an iPhone are roughly betweeen $12.50 and $30 per unit.

      Yes, but the source's claim was about total production costs, not just labor costs. Total production costs for an iPhone are around $225-$250.

      Now you can claim Foxconn is a biased source for this info, but your claim about labor costs makes no sense because that's not what Foxconn said. There are many other production costs than just labor. Most of the components would still be sourced from China, and that's going to add a lot to the costs if production moves to the US. Then there's more regulation, more cost to build the factory, etc etc. They are claiming the whole production could would double, not just the labor.

    6. Re:Labor expenses are a tiny part of total cost by imgod2u · · Score: 1

      We're talking *from* Apple's perspective. It makes 0 sense for them to go and manufacturer in the U.S. even if labor costs were exactly the same.

      As for abandoning current client designs in favor of a bigger player's demand on turnaround time...that would happen in the U.S. as well. Only it'd be 2 months vs 2 weeks instead of 2 weeks vs 2 days.

      You should try a simple PCB for a widget and try to contract a manufacturer in China. I think you'll be surprised at how much you can get in how little time. We're not talking auto-grade, flex-cabled parts with 7-layers here. If I have an idea for a doo-dad on the scale of a Rasberry pie, it's getting done in 2 weeks and ready to sell in the hundreds of thousands.

    7. Re:Labor expenses are a tiny part of total cost by bluefoxlucid · · Score: 1

      The consumer then pays that cost and no longer has that income to spend in that cycle.

      There's this weird belief that spending money creates money, and so raising wages or some such will somehow create jobs. More-expensive products create less purchasing, and so destroy jobs. When you pull jobs back from an import market, you can create or destroy jobs in total; but the overall effect, guaranteed, in increasing the cost to make products is a decrease in wealth.

      The best part? Malthusian population growth will adjust out any new jobs you create or any jobs you lose in the process. More jobs? Population expands until you get back to your stable unemployment rate. Fewer jobs? Population growth slows until it adjusts for your level of wealth and returns to your stable unemployment rate. Five years later, the only thing you've gained is an increase in poverty.

    8. Re:Labor expenses are a tiny part of total cost by HornWumpus · · Score: 1

      At the volume Apple makes, everything is scheduled way ahead of time anyhow. They have little need for through hole, 2 layer boards.

      I bet the rapid prototyping phase is done in California.

      --
      John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
  21. What's the problem? by r1348 · · Score: 1

    Half the profits.

  22. It's already $700 by rsilvergun · · Score: 1

    Adding another $300 wouldn't phase me.

    --
    Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
    1. Re:It's already $700 by Anonymous Coward · · Score: 0

      A couple years ago, Cook told Obama it was impossible.
      Now it's gonna happen, because they know Trump won't give two shits for whatever comes out of their mouths.

    2. Re:It's already $700 by geekmux · · Score: 1

      Adding another $300 wouldn't phase me.

      I know this is an odd analogy, but this sounds a lot like the justification from the average 2-pack a day smoker when it comes to rising cigarette prices.

      Biggest lie in the universe is "I'm gonna quit when the price reaches $X per pack!"

  23. Assembly costs are maybe $10 by evilcoop · · Score: 1

    So what. Doubling the assembly costs would mean little to the final selling price.

    iPhone 6 Bill of Materials.
    http://www.techinsights.com/teardown.com/apple-iphone-6/

    1. Re:Assembly costs are maybe $10 by Anonymous Coward · · Score: 0

      No proof that assembly would cost more. Apple said a couple years ago that they were going to go to full robotic assembly of their iPhones. So no people to pay. I find it interesting that Apple only asked the company that is currently make the phone to give a bid on moving to the U.S. How about asking a company already here? F Apple.

  24. Forget labor by rsilvergun · · Score: 1

    It's environmental. Apple can't just dump poison into ground water in the States.

    --
    Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
  25. Reason for concern by SuperKendall · · Score: 1

    You should be very worried about what China would do to the entire earth if they become unsettled... after all maybe if they can't work in a factory, they can work in the military...

    But apart from that we should simply worry for humanitarian reasons.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
    1. Re:Reason for concern by kaatochacha · · Score: 1

      So you're worrying more about person A in another country than possible person B in this country? Assuming both being equal, I'd go with B solely on "buy local". I do the same with stores: I buy from a local shop more than a national chain if possible.
      China's a big boy now. It's not your job to take care of them.

    2. Re:Reason for concern by SuperKendall · · Score: 1

      So you're worrying more about person A in another country than possible person B in this country?

      Absolutely, because America has a lot more in the way of social safety nets, and also as noted China is either much more likely to expand the military greatly if there is internal discontent, or simply to kill dissenters (which we do not do here on the scale China does).

      China's a big boy now. It's not your job to take care of them.

      If you care about the survival of humanity at all it is best to be cautious around them.

      --
      "There is more worth loving than we have strength to love." - Brian Jay Stanley
  26. First-world neighbour by Yvan256 · · Score: 1

    How about Canada, eh?

    1. Re:First-world neighbour by Oswald+McWeany · · Score: 2

      yeah... poor Canadians having to deal with the third world on their Southern border.

      --
      "That's the way to do it" - Punch
  27. wrong number ... 2x is not correct by Anonymous Coward · · Score: 0

    My personal experience is that this is the wrong number.

    My result from previous work with technologies moved from US to China, yes at much lower volume so different economy of scale, and likely a different type of product, not a computer, is that the ratio of costs is below 1/7th. The cost to move backwards would be 7x.

    If Foxconn is saying 2x, then I would suspect that they take a factor of 3.5 of the true base cost and retain that much value when they pass the product to Apple.

    1. Re:wrong number ... 2x is not correct by HornWumpus · · Score: 1

      Low volume is hand work.

      This is largely comparing the running costs of two largely automated factories and assuming all subassemblies are still made where they currently are.

      Foxconn has no reason to lowball this cost, rather the opposite.

      --
      John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
  28. Really? by Anonymous Coward · · Score: 0

    Ah, NO.
    The "costs" won't double.
    BOM changes very little, with a small shipping and storage cost added in.
    What really happens is the "post-tax profits" will be cut by 40%.
    Not the same thing.
    Once you take into account the tax-shipping shenanigans Apple uses, they don't want to build anything here as it becomes much harder to book those profits off-shore (and un-taxed.)

  29. Do both by hawguy · · Score: 1

    They should manufacture phones in the USA and China, price them accordingly and sell them with a big American flag on the USA phones. I'm sure everyone in the red states will snap up the higher priced American phones and then manufacturing jobs will all roll back to the USA.

    1. Re:Do both by Thud457 · · Score: 1

      Back in the 90's Walmart made a big deal about trying to carry goods "Made in America".
      We all see how that worked out.
      Most consumers, even patriotic the ones, value cost above all else.

      --

      the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff

  30. They would also have to pay for the plant by drnb · · Score: 1

    The additional costs would also include the new plant. I believe the Chinese government built their factories for them as an incentive to get them in China in the first place.

    1. Re: They would also have to pay for the plant by Anonymous Coward · · Score: 0

      China ain't gonna just stand buy and let all their hard work go down the drain. Expect a fight.

    2. Re: They would also have to pay for the plant by Anonymous Coward · · Score: 0

      By** sorry coffee still kicking in.

    3. Re: They would also have to pay for the plant by drnb · · Score: 5, Insightful

      China ain't gonna just stand buy and let all their hard work go down the drain. Expect a fight.

      We are already in a "fight". The proposals are merely about "fighting back" rather than just "taking it". For example see China adopting US and EU made jet engines but require technology transfer and manufacture in China, while simultaneously planning to switch to domestic jet engine companies in a decade after the necessary expertise is accumulated. If Chinese markets were to become more open to US goods and services (including forgoing the requirement of domestic partnerships), IP was better protected, and a rule of law more fairly applied (see Fellows paper shredder case) then its unlikely factories in China would be a "big" issue.

    4. Re: They would also have to pay for the plant by Anonymous Coward · · Score: 0

      By** sorry coffee still kicking in.

      No problem, I do that after coffee too. The brain thinks one thing but the fingers type something else.

    5. Re: They would also have to pay for the plant by Anonymous Coward · · Score: 0

      IP was better protected

      Stop trying to apply your bullshit IP laws internationally. They're not in our interests. We don't want them.

    6. Re: They would also have to pay for the plant by Anonymous Coward · · Score: 0

      China ain't gonna just stand buy and let all their hard work go down the drain. Expect a fight.

      We are already in a "fight". The proposals are merely about "fighting back" rather than just "taking it". For example see China adopting US and EU made jet engines but require technology transfer and manufacture in China, while simultaneously planning to switch to domestic jet engine companies in a decade after the necessary expertise is accumulated. If Chinese markets were to become more open to US goods and services (including forgoing the requirement of domestic partnerships), IP was better protected, and a rule of law more fairly applied (see Fellows paper shredder case) then its unlikely factories in China would be a "big" issue.

      And we can thank our Republican,Democrat,Tory,Labor,Liberal party overlords for this, who 30 years ago sole us on the idea that bigger profits were a good thing and manufacturing would be replaced by service jobs.

      What they didn't tell us is that none of the increased profit would make it down past the top 1% and the best you could hope for unless your parents were loaded was being a barista, stacking shelves or flipping burgers.

      Don't blame China, they're just doing what we (or at least our overlords) asked of them - increasing profits.
      ANd they way to increase short term profits is teach other countries the skills you have learned, sell them the tech you need to make your profit, and then give them access to the IP to make your profit.

      You can hardly blame the Chinese for shafting the west.
      We asked for it and lubricated the passage.

  31. Slaves are cheaper in China by Anonymous Coward · · Score: 0

    Clearly....if you need slaves, don't do it in your jurisdiction, otherwise Human Rights activists (using iPhones) will bug you. Like for tortures....use Guantanamo...it is unconstitutional to torture people in the US jurisdiction.

  32. I don't want a new phone every year anyways by Anonymous Coward · · Score: 0

    So long as you properly support the ones we have, but that wouldn't fit the "disposable" business model of selling the used ones on the black market to third world countries to avoid taxes. And don't get me started on privacy, because there's no point to carrying a portable personal computer around if you don't own the data on it.

  33. Disclaimers attempt to pre-empt racist accusations by drnb · · Score: 2, Insightful

    Why do posts have to come with

    Disclaimer: I didn't vote for Trump?

    Because in these "politically correct" "entitled to a safe zone on demand" times anything hinting of Trump support is "hard evidence" that a person is a racist and a misogynist. There is no possibility that a person might think a Trump proposal might actually have merit or at least be the least worse or two bad proposals.

    Disclaimer: I voted, but not for Trump nor Hillary.

  34. Made in America != Assembled in America by enderwiggen · · Score: 1

    The first line of the article reads "iPhones might one day soon carry "Made in America" labels."

    If Apple's intent was to find out what it would cost to get an official "Made in the USA" certification, then the change in COGS would not be just a minor increase in price due to only labor costs.

    "For a product to be called Made in USA, or claimed to be of domestic origin without qualifications or limits on the claim, the product must be "all or virtually all" made in the U.S." (source https://www.ftc.gov/news-events/media-resources/tools-consumers/made-usa).

    in this context, "All or virtually all" means that all significant parts and processing that go into the product must be of U.S. origin. That is, the product should contain no — or negligible — foreign content.

    Having to comply with that could be very difficult. Apple could try to argue that the majority of the content of the iPhone is software made in the US, but at a minimum, I'd expect them to have to have some sort of qualified labeling or start to do all the molding, machining, PCB creation, PCB population, etc in the US too.

  35. Suicide Nets by Anonymous Coward · · Score: 0

    How much will they save if they no longer need to line their assembly buildings with suicide nets?

  36. American robots for the win ... by drnb · · Score: 1

    But don't worry Americans are twenty seven times as fast at sticking all those fiddly things together, even without the years of experience and training the current staff have.

    American robots may be. Note that Apple is investing in robots to disassemble iPhones for e-waste and recycling purposes. Assembly would seem a related problem.

    1. Re:American robots for the win ... by Anonymous Coward · · Score: 0

      I would love that technicality.
      We brought manufacturing to the U.S! ...but it's still no increase in American jobs because it's done by robots.

    2. Re:American robots for the win ... by Joce640k · · Score: 1

      It's work for the robot makers.

      (unless they're made by robots)

      --
      No sig today...
    3. Re:American robots for the win ... by ShanghaiBill · · Score: 1

      It's work for the robot makers.

      Most industrial robots used in America are imported from Japan.

    4. Re:American robots for the win ... by drnb · · Score: 1

      I believe Apple is designing their own robots.

    5. Re:American robots for the win ... by drnb · · Score: 1

      I would love that technicality. We brought manufacturing to the U.S! ...but it's still no increase in American jobs because it's done by robots.

      There are some jobs, maintaining and repairing the robots. Some prep or post manufacturing handling may need some people. I believe the robots are designed by Apple so there are those jobs too. Plus the money is being spent in the US rather than China so it stimulates the US economy not the Chinese economy.

    6. Re:American robots for the win ... by laird · · Score: 1

      Assembly is highly automated. They only use people for things that robots aren't good at. The labor cost per phone is under $10. Paying US wages wouldn't make much of a difference in the cost of the phone.

    7. Re: American robots for the win ... by cyber-vandal · · Score: 1

      Surely not the iRobot?

  37. What a BS! by fubarrr · · Score: 1, Interesting

    >The component cost for an iPhone 7 is estimated to be about $250

    NOWAI! Iphone 3 did cost around USD $30 in materials. Four, possibly around $45 for materials + fabrication costs due to more custom parts/manufacturing processes and genuinely better component selection. FYI, Samsung posted material + fabrication cost of 76k KRW for Galaxy S7 in their earning call.

    IHS idiots calculate the BOM cost using retail component prices. Five years ago they were saying that the microscopic battery of the third iphone did cost 11 buck. Back then, I could've easily found better prices retail in Chinese malls, like for 70-90 cents.

    1. Re:What a BS! by fubarrr · · Score: 1

      IHS also claims SoC cost of $26 which is BS, can't cost more than $12 at 460 DPW and 14nm process. FABs are ready to lick feets of apple managers to get them as client. So assume 20% profit margin for the FAB + packager.

  38. You forgot most of the costs by raymorris · · Score: 1

    You forgot to account for most of the costs. The marginal cost to build one more iPhone, parts and assembly, is about $260. Those 100,000 engineers working for Apple don't work for free, though. Their two big facilities in Cupertino cost about $8 billion, in total their office buildings cost over $15 billion. (Mortgaged and leased for few hundred million per year.) Those Apple stores in the mall? Not free.

    Assuming you buy your iPhone at another retailer, rather than the Apple store, the retailer might get $200 to pay their rent, employees, advertising, etc.

    When a phome breaks after 6 six months it cost Apple $350 to replace it.

    1. Re:You forgot most of the costs by BronsCon · · Score: 2

      So the phone originally cost Apple $260 to make, then costs another $350 to replace under warranty, and they only get to keep $495 of the $695 retail price of the original sale? So... The cost to Apple of the original sale, plus replacement, is $610 and they only get $495 of that original sale? So they're assuming a $115 loss (before facilities, taxes, and paryoll) on every 32GB iPhone 7 sold?

      Nah, I think the reality is more along the lines of: we're looking at a BOM cost built using retail pricing rather than Apple's bulk pricing, or even what you could get parts for at a Shenzhen market. Think closer to $50 in parts and $65 for the warranty replacement, with the retailer getting $150 of the retail price; Apple gets to keep closer to $430 of the retail price. Also, remember that Apple has been working on Campus 2, a $5B expenditure, since 2010; not all of that $5B is attributed to the iPhone, let alone the iPhone 7. None of the remaining $10B in facilities is attributed to the iPhone. The total labor cost of an iPhone by the time it reaches EOP (remember, each unit reduces the non-manufacturing portion of this cost) is around $30. We'll circle back around to facilities in a moment, but I want to clarify that, after labor, Apple still has $400 of that retail price in their pocket; call it $399, landed.

      Now, Apple will sell 75 million iPhones this year, which will net them just over $29.9B after materials, labor, and shipping. Even if they had to pay their entire facilities cost out of that, they'd have a profit of nearly $15B.

      Double the manufacturing labor cost ($20 -> $40), which increases the overall labor cost per unit to $50 and they still pull in just over $28.4B before facilities. Double the entire cost (including that warranty replacement) and they make $19.8B before facilities. Worst case, if they had to pay for all $15B of facilities costs out of one year of iPhone sales, they're still left with $4.8B in profit for the iPhone alone; that's what they'd be taxed on.

      Of course, since the warranty replacement rate on the iPhone is less than 100%, I did not factor in Apple Care, and I only considered the 32GB model (which represents the lowest profit margin), my numbers are a bit low.

      --
      APK quotes people (including myself) without context and should not be trusted. Just thought you should know.
  39. sure by superwiz · · Score: 1

    If they keep making them the same way they make them now. But the technological progress works at their economies of scale. They have no incentive to automate many of the menial tasks which go into production of the devices if hiring X10 more people somewhere else is cheaper than automating at home. But this is not progress. It's regression. First, new automation technologies don't get built, so cheaper (in the long run) production techniques don't get implemented. And, second, fewer people are trained in building industrial automation technologies. So other industries don't benefit from the added insight of those people. Everyone loses when automation is disparaged. Companies start looking for places with the cheapest cost of menial labor.

    --
    Any guest worker system is indistinguishable from indentured servitude.
  40. Still only part of the story, AFAICT by Zocalo · · Score: 1

    It's not a very well written piece, as there seem to be several key points that are likely to have a significant impact not considered:

    Where is the factory going to come from? How much does that cost, and how long will it take to get online?
    Have they considered the 45% tariff Trump is planning on putting on goods from China? Apple will still need to import the parts, I assume, unless they are planning on making those in the US too, and components are still goods, just like finished products.
    Where do the staff come from, bearing in mind that Trump is planning on deporting many of the immigrants that are actually prepared to work for peanuts. What about the costs and time required for any training (such as it is)?

    Given the lack of details, it seems far more likely that someone did some quick numbers on a napkin that are unlikely to have any real basis in fact, than a detailed analysis of all factors likely to be applicable.

    --
    UNIX? They're not even circumcised! Savages!
  41. Asking the Foxconn guarding the henhouse? by TomGreenhaw · · Score: 1

    Maybe it should go out to a competitive bid. Perhaps with investments in robots, they can be made more cheaply here. Maybe they can be made in multiple places. They already build Macbooks here.

    --
    Greed is the root of all evil.
  42. Re:So? No backup for Apple by Anonymous Coward · · Score: 0

    Cost is somewhat irrelevant.

    The article failed to mention lead time to set up a facility,

    If external factors prevent Apple from using China, the supply chain fails and no iPhones=no revenue until the facility comes on line.

  43. Missing something? by Pascoea · · Score: 1

    Why would you go to Foxconn to request something like this? They don't have a US manufacturing capability. Of course it's going to be expensive as hell to build it from the ground up. Why wouldn't they solicit a bid from one of the US based contract manufacturers?

  44. Comment removed by account_deleted · · Score: 1

    Comment removed based on user account deletion

  45. The cost to Apple doubles, driving up retail $6. by mr_mischief · · Score: 2

    The cost to Apple doubles, driving up retail $6.

    The manufacturing cost of an iPhone 6 is about $5. The parts and materials cost around $220.

    Making it cost $10 or $11 to manufacture isn't going to break anyone.

    http://www.zdnet.com/article/h...

  46. Chinese Manufacturer Bias? by mlw4428 · · Score: 1

    So they asked Chinese companies what it would cost to build on American soil. Is anyone surprised when the Chinese went: "Oh it'd cost like, double man, you might as well just keep that juicy contract with us. Over here. Where we can just put nets up to catch the suicide jumpers."

  47. They should asking Jabil by Ungrounded+Lightning · · Score: 1

    They should try asking Jabil whether they could do it for them and assemble in-country.

    But I'd be just as happy if they didn't. If they're able to suck up Jabil's capacity faster than Jabil could build out more, even for a while, that would make it harder for the rest of Silicon Valley to get stuff made.

    --
    Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
  48. $200 billion in cash and securities... by geekmux · · Score: 1

    ...means I really don't give a shit what impact American manufacturing creates. They will still make an obscene amount of profit per product regardless, so let's kindly stop worrying about this bullshit concern from Apple. They won't be suffering.

  49. Wages stagnant so this seems expensive by Anonymous Coward · · Score: 0

    This seems expensive because wages have been stagnant in America the last 30 years. If American wages have kept up with inflation over the past 30 years rather than their jobs being exported and wages kept low, people could afford phones at these prices.

    1. Re:Wages stagnant so this seems expensive by sit1963nz · · Score: 1

      The USA got very lucky, because after WWII they were the only large, highly populated country with significant food and natural resources to not get bombed. Asia and Europe were rebuilding, and the US go to sell them stuff to do that with. WWII also ramped up production, that production got converted to non military uses, like farm trucks, cars, aircraft and many of the technologies developed in WWII ended up with Civilian uses too. This created a huge demand for consumer products and it fuelled the economy well into the late 60's, the the US "peaking" in the early 1970's. this was when the rest of the world had caught up, they could manufacture for their own needs, produce their own consumer goods. Where we are now is that US dominance of world trade has gone, in the 1950's it accounted for 60% of the worlds GDP, how its down to about 20%. What had sheltered the US was the fact that the pie was growing significantly and so it seemed that the US was growing too, and it was, but its percentage of world trade was actually falling. Improved telecoms/IT and shipping has allowed globalisation, the time restraints and shipping costs have fallen, so that now business can easily be done in real time right around the world, design changes can be handle in real time, and the cost per container has in real terms fallen dramatically. Labour costs in Asia created and attractive environment for manufacturing, which still required significant about input. However Asia has modernised too to keep up with the increasing volumes of goods, for example Apple sells almost a million phones a day. Manufacturing costs in Asia are still cheaper than the USA, and they also now have a huge infrastructure to support that manufacturing. This is unlikely to ever be replicated in the USA. Any shift in manufacturing would come with high automation (which can also be used in Asia), meaning any jobs created would be low in number relative to what is currently employed in Asia (Foxconn currently employs 1.3 million people). Wages will not rise in the USA, because comparatively they are high, and because the ease of doing business anywhere else in the world allows for most jobs to be replicated cheaper else where. Further automation will also serve to keep wages down, not just in labour intensive areas, but in areas such as law, accounting, medicine, engineering, transport as AIs do the job quicker and with fewer errors. A Trade war with China will see other Asian countries take up the manufacturing, or Brazil, Africa, it will be a case of whack-a-mole, and retaliatory action by these countries against the US would offset any gains, and they may even make things worse. The worst outcome would be to become more isolationist, the US only having 4% of the worlds population could soon see its position fall faster as other countries continue free trade to each others benefits. There is also the real risk of US policy rejection, particularly in the areas of copyright and patent that would greatly harm many of the US industries leading to further stagnation.

  50. Possible - refer to Motorola's cellphone example by Anonymous Coward · · Score: 0

    Motorola built cellular phones in high volume in Libertyville IL for years. Supply chain was modern and sourced components from everywhere, but real assembly (PCB reflow, not just screwdriver final build) was there in Libertyville. Employment was about 5,500 in the factory portion, about another 600 in engineering and admin. Then management turned over and the new top guy decided Moto could slightly improve profits by offshore manufacturing. It wasn't a large difference; just enough "better" for someone who didn't understand or value a short final supply chain to decide to make the call for going offshore. The building is still there, 1.1 million square feet, recently changed hands again for less than $10 million; GPS coordinates 42.288864 -87.999917. I worked in that building every workday for years. The disruption to coming onshore would be large, but absolute costs aren't that different - labor is a indeed a small portion of total cost. "Double the cost" for onshoring is not supported by the facts.

  51. Cut full time hours down and remove healthcare by Joe_Dragon · · Score: 1

    Cut full time hours down and remove healthcare form jobs to start

    1. Re:Cut full time hours down and remove healthcare by bluefoxlucid · · Score: 1

      Actually, I plan to cut full-time hours as a contingency activated for the risk of destroying the U.S. economy by making it too wealthy and creating too damn many jobs.

      Cutting working hours doesn't increase technology--it doesn't reduce the amount of labor-time required to produce something. That means you have to employ more people to make the same things. To keep the same standard-of-living, you have to pay them more; but that's not actually possible: they're working 80% as many hours, but still have to pay 100% as many hours's-worth of wages to buy a product--they can only buy 80% as much.

      In a situation where the United States consumer purchasing power actually increases greatly, you could create 118%-124% employment (negative unemployment). The labor shortage would destroy the economy. To prevent this, you hobble the economy by cutting full-time working hours. Somewhere in the range of 28-32 hours per week should leave people with a reduction in buying power sufficient to drop employment to 94.4%--a 5.6% unemployment rate.

      In a general sense, you just suggested we respond to Americans becoming poorer by making Americans even poorer than that by paying them less and reducing their standard-of-living and quality-of-life. In a more-complete sense, you suggested reducing the total wealth available to the American people as a whole, which would collapse our job market and sharply-increase unemployment.

  52. expensive suicide nets by edxwelch · · Score: 1

    The cost increase is because it's more expensive to install the suicide nets in American factories:
    http://www.dailymail.co.uk/new...

  53. Never go full retard by raymorris · · Score: 0

    > cost Apple $260 to make, then costs another $350 to replace under warranty, and they only get to keep $495 of the $695 retail price of the original sale? ... So they're assuming a $115 loss (before facilities, taxes, and paryoll) on every 32GB iPhone 7 sold?

    You're pretending every single phone they make has to be replaced under warranty? Never go full retard. I'm not sure why you bothered to write anything further after you already went there - it's pretty clear your post wouldn't be worth reading.

    If you'd like to know their actual costs and margins, rather than completely making shit up, their annual report is right there on their web site.

    1. Re:Never go full retard by BronsCon · · Score: 2

      You're pretending every single phone they make has to be replaced under warranty?

      If you'd read my entire post, you'd see that I address that very point. You, on the other hand, implied that the cost applied to every phone; or, at least, failed to address the fact that it does not.

      And chiding me for making shit up? Really? It's the middle of my work day, I don't have time to look up the actual numbers, but I do happen to know the numbers I made up are much closer to reality than the numbers you made up. Be careful with that stone in that glass house.

      --
      APK quotes people (including myself) without context and should not be trusted. Just thought you should know.
  54. QQ by Anonymous Coward · · Score: 0

    Quality too.

    1. Re:QQ by Anonymous Coward · · Score: 0

      Quality like Quantum Fast

  55. Double Whappy For Apple and Timmy by Anonymous Coward · · Score: 0

    Remember the "Star Trek" dream during the Mac days?

    Let me remind you.

    Apple was building Macs in southern CA and across the boarder in Tijuana MX using special-built Motorola proprietary parts and soldering everything to the motherboard. The only thing a "owner" could do, without resorting to de-soldering and re-soldering, was to change the battery powering the EPROM chip and system clock.

    Jobs changed that when he returned!

    By 2009, Macs had become mostly modular with InTel and other hardware. The operating system, OS X, had become usable to programmers thanks to netBSD and NeXTSTEP by the way.

    Now at 2016 Timmy and the other Toner Heads at Apple, the guys who are Marketing and Sales Mid-level managers who think an "upgrade" is "black, gray or silver tone on the case" have changed the insides of the Macs back to 1986 days.

    That is the problem that Marketing and Sales Mid-level manager leadership has given Apple; a later-day XEROX with no talent and no vision (just mid-level managers collecting paychecks, and no printers either).

  56. Costs by fluffernutter · · Score: 0

    Just because the cost to make them doubles doesn't mean Apple has to pass that cost onto the customer. What is a markup on an iPhone? If it costs $200 to make now then the retail price will go up by $200, only if Apple chooses to pass the entire blow onto the customer. They could easily eat the whole thing.

    --
    Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
  57. Okay? by Anonymous Coward · · Score: 0

    Is that most likely because they won't have slave labor camps where all employees live on-site and work insane hours constantly on their feet? Or is it because they won't be able to have emissions that are toxic to the environment spewing into said environment?

    And let's be clear, the quote is misleading because it says "the cost will double", but it's the manufacturer stating that, so their cost will double -- not the price of the iPhone. Naturally -- and appropriately -- the price of the iPhone will inflate to include all/most of that increase, but Apple already turns enormous profits per iPhone relative to the manufacturing cost (estimated around $200 for the latest iPhones, which they sell for >$700), so it would be a modest bump.

    It would also be a cost that should go down after the initial investment. If nothing else, it's worth the opportunity cost and the improvements to the environment by not making them in toxic-spewing plants.

  58. Duh, Slave Labor saves money! by Lumpy · · Score: 1

    If americans had to pay for "made in america" products they would not own much. Even Harley davidsons are made from china parts and assembled in mexico

    --
    Do not look at laser with remaining good eye.
    1. Re:Duh, Slave Labor saves money! by plopez · · Score: 1

      But increased wages would compensate for that.

      --
      putting the 'B' in LGBTQ+
    2. Re:Duh, Slave Labor saves money! by Major+Blud · · Score: 1

      If americans had to pay for "made in america" products they would not own much. Even Harley davidsons are made from china parts and assembled in mexico

      This simply isn't true.
      http://www.harley-davidson.com...

      It is true that some parts are made overseas. The front forks are made in Japan by Showa, and some of the electronic components as well.

      Nowhere is Mexico is a Harley-Davidson made, much less assembled. The bikes sold in the U.S. and Europe are made in either Kansas City or Milwaukee. The Street model is made in India (and assembled in Kansas City for the U.S. market), and the ones sold in Brazil are made in Manauas Amazonas).

      --
      If you post as Anonymous Coward, don't expect a reply.
    3. Re:Duh, Slave Labor saves money! by Anonymous Coward · · Score: 0

      Dang you! Now I want a Harley Sportster....

    4. Re:Duh, Slave Labor saves money! by sit1963nz · · Score: 1

      But increased wages would compensate for that.

      And increased US wages will push up the cost of everything else in the USA, including exports. Now suddenly you have more than $2 Trillion is exports at risk because the rest of the world can and will still trade with China, India, Australia, the EU, etc etc etc. The US only accounts for 20% of the worlds GDP and 4% of the worlds population. Apple, HP, Dell, etc etc etc will still manufacture for the rest of the world in Asia, they have to to compete in the international markets. At best these companies will bring back 1/3 of their manufacturing back to the US, Clothes, Shoes, Electronics, car parts, books,etc etc etc and this WILL cause ALL prices to rise in the USA because things like the ink used to print the picture on the box may have once come from China and now needs to be made in the USA at higher costs. A trader with China will only harm the USA long term , the US is NOT the only country that trades with China. China is already working on an Asian Trade bloc (60% of the worlds population), the US can not afford to get excluded, and yes, just as you think the US can make life tough for the Chinese, China can make it tough on the USA, you do NOT get a free ride.

  59. Cheap because of child labor by oh_my_080980980 · · Score: 1

    What did you expect when you use child labor....

    1. Re:Cheap because of child labor by plopez · · Score: 1

      With no OSHA or EPA protections either.

      --
      putting the 'B' in LGBTQ+
  60. LIBERAL LIES -- iPhones can be made cheaper in US by Anonymous Coward · · Score: 0

    After our Best Leader of All Time rounds up the filthy Mexicans and starts placing all captured illegal border crossers into "Immigration Detention Centers", then he will NATIONALIZE Apple and make it even better. Then, for the masterstroke -- he will order the Mexican detainees to make our phones for FREE

    FREE iPhones for all White Americans who swear Loyalty Oaths!

  61. Gumball machines by Anonymous Coward · · Score: 0

    Apple iPhones are such cheap pieces of crap, they might as well be dispensed from gumball machines for $.25.

  62. I have to call by DaMattster · · Score: 1

    Bullshit! I think it can be made for a reasonable cost. It sounds like Apple is fudging a few things. I remember when US Airways got it's panties in a bunch over having to give up it's foreign call centers. It turns out that on-shoring all of the reservation processing added only a minor cost increase.

    1. Re:I have to call by sit1963nz · · Score: 1

      Bullshit! I think it can be made for a reasonable cost. It sounds like Apple is fudging a few things. I remember when US Airways got it's panties in a bunch over having to give up it's foreign call centers. It turns out that on-shoring all of the reservation processing added only a minor cost increase.

      That is because the majority of its costs Pilots Air hostesses Baggage Handlers Airport Landing fees Airport ticket counter costs Fuel Aircraft were ALL paid for in US$ and at US prices, the minimum wage call centre costs were always trivial compared to those other costs

  63. why not settle for 50% less profit ? by Anonymous Coward · · Score: 0

    Apple is over charging anyway. There's a reason why the Company is worth so much money... Make the product in the USA, earn less profit and spread the wealth locally. be a good citizen. I bought my Mac Pro because it was made in the USA.

  64. Not according to Jobs... by Anonymous Coward · · Score: 0

    If you read his book, he discusses this. It was actually environmental regulation that was the problem. It is easier to make adjustments to manufacturing in China. In the US, it takes years to get approval to do everything.

    Apparently, the outgoing administration was very unamused by this answer, and Apple was punished in the press and by regulation for a while, until suitable donations were made.

  65. Good idea gone wrong by Anonymous Coward · · Score: 0

    Sigh, Govt as usual. Not what Trump should be doing.

    Forcing Apple to build something here is dumb.

    The problem to fix is setting up a system so that Apple WANTS to do it here because it works better.
    That requires moving the supply and support chain here.
    Just doing final assembly here is a joke of political stunt.

    It would make a nice sound bite, but not help a bit for most US workers.
    In fact it could be worse for them if it makes their Apple toys cost a bit more.

  66. iPhone Eagle by phorm · · Score: 1

    Proudly made in the USA, with new embossed Eagle hologram emblem on the rear to show that you are a patriotic supporter of the U.S.A

    Hey, if people will pay for a damn gold iphone, why not?

  67. It's a wash by plopez · · Score: 1

    Wages will go up so I cna afford to buy more crap. By some estimates I am making half of what I should be making. See this citation for a discussion of the matter.
    http://www.pewresearch.org/fac...

    --
    putting the 'B' in LGBTQ+
  68. Ask Google/Motorola by Anonymous Coward · · Score: 0

    They made the first Moto X in the US. AND they could turn around a custom Moto Maker design in a few days. They should be able to give you some indicators about making phones in the US.

  69. Re:The cost to Apple doubles, driving up retail $6 by Anonymous Coward · · Score: 0

    The cost to Apple doubles, driving up retail $6.

    The manufacturing cost of an iPhone 6 is about $5. The parts and materials cost around $220.

    Making it cost $10 or $11 to manufacture isn't going to break anyone.

    http://www.zdnet.com/article/h...

    True. It would also seem to be unlikely to create any "good payin' jawbz" in the US.

  70. Comment removed by account_deleted · · Score: 1

    Comment removed based on user account deletion

  71. Not just iPhones.....other industries too by Anonymous Coward · · Score: 0

    Anyone involved with manufacturing of industrial products (especially those that involve castings) already knows of the pricing difference. It is not a new thing and has been going on for at least 15-20 years, probably longer.

    From personal experience, every time I have seen a comparison of "making it in America" vs going global (mostly China but really all BRIC countries)......the difference is at least 50% and more commonly around 70%. That includes the total cost: components, labor, logistics, tariffs, etc. If costs $100 to make here in the USA, then you can reasonably expect it to cost $30-$40 if you build it in a BRIC country and ship it back to the USA. The products I am specifically familiar with are valves, pipe, and vessels but this difference is not confined to those industries. The scope covers pretty much anything that is made/manufactured - ie: hard goods.

    There is a reason everything is made in India and China: It is cheaper by a lot. Free markets work and nobody is going to pay 50% more for anything just because it's made in America. There may be a few products here and there that could justify the difference in terms of QA but for the most part, the lower cost/same quality is going to win out every time.

  72. I'm willing to pay more by myid · · Score: 1

    I'm willing to pay more for a product that's made in the US, or at least not made in China.

    Also I'm an AAPL shareholder, and I want Apple to move more of its manufacturing out of China, even if that hurts AAPL stock price.

    I can't speak for anyone else, but that's what I want.

    1. Re:I'm willing to pay more by sit1963nz · · Score: 1

      Well for the 96% of the people who don't live in the USA, we aren't willing to pay more. More US jobs does nothing for us, but increased prices impact us.

  73. Re:Disclaimers attempt to pre-empt racist accusati by Anonymous Coward · · Score: 0

    Wow- really? Me too. I voted for Darryl W. Perry for president. Who did you vote for? (Darryl W. Perry ran for the libertarian party, lost, then was a write in after the fake libertarian Johnson won the 'libertarian party' vote, but good news is at least in NH Darryl W. Perry is now running the NH Libertarian Party so we'll have a real libertarian party again for the first time in New Hampshire in a very long time, the first in the country to actually be brought back to its roots).

  74. Cost by Anonymous Coward · · Score: 0

    What does cost matter? We all know the Apple flock will buy it anyway.

  75. Re:Hold Up by sit1963nz · · Score: 1

    Foxconn already functions is 14 countries. Can you explain who else has the knowledge to work this out ? Not you, obviously. Do you know anything about large scale industrial manufacturing ? For example, Apple produces about 1 million phones a day, the number of new cars bought in the USA each year is about 7.5 million, or just over a weeks worth of iPhone production. Scaling up manufacturing while maintaining quality control, availability of components, etc etc is a huge problem. And its not just the assembly, there are all the parts that go into it, what are the logistic of that ? Shipping time, Storage, production flows, getting the end products out the doors Each circuit board needs to be tested multiple times during the various stages of production, the machines to do this are not cheap, the cost of designing the tests are not cheap, and then in 12 months time they all have to be redesigned for the new model. There is how much power the plant uses, the maintenance of the plant, water, waste, the logistics of getting the components into the factory, sorted, loaded into the machines. And they are not just doing stuff for Apple, there is Dell, HP, Samsung, etc etc etc, they are the experts on this. God, you don't go an see your plumber to get an estimate of costs to get a filling in your teeth, you go to the people who know the job.

  76. More factors by fyngyrz · · Score: 1

    The $649 phone would wind up being around $880. No shipping costs would really be saved because I am assuming the components for the iPhone would still be sourced from China because that's where the supply chain is nowadays, maybe they factored it into the doubling.

    I wonder if they factored in Trump's intended 40% tariff on those part cost estimates?

    Or the fact that China says, "you erect trade barriers, we will too."

    Just wondering over here.

    --
    I've fallen off your lawn, and I can't get up.
  77. Modern Manufacturing by fyngyrz · · Score: 1

    If they put the plant in Michigan, hire a bunch of middle aged former factory workers, organize them into 3 shifts of eight hours, they should be able to run the plant 120 hours a week.

    You know what would most likely happen? They'll build a new plant, it'll be highly automated with the very newest tech rather than employ any line workers, they'll hire three shifts of managers with green cards from India to watch the computer report the status of the assembly lines (and record everything they do on cameras.) The plant will run 168 hours a week. They'll incorporate parts from China, which are now 140% the cost of what they were previously because President Trump wants that tariff really bad, and they'll charge you double and then multiply that by 1.4.

    Welcome to the new world, where we don't buy stuff from China anymore, and we still have no work, and we can't afford anything.

    President Trump's gonna make America Grate Again. Ouch! Here, hold my footgun.

    --
    I've fallen off your lawn, and I can't get up.
    1. Re:Modern Manufacturing by tbannist · · Score: 1

      You know what would most likely happen? They'll build a new plant, it'll be highly automated with the very newest tech rather than employ any line workers, they'll hire three shifts of managers with green cards from India to watch the computer report the status of the assembly lines (and record everything they do on cameras.) The plant will run 168 hours a week.

      That is, of course, far more likely. My point was that there are plenty of factory workers who could be employed to do the job and wouldn't need to live in a dorm. If they're replacing Chinese employees, who still make far less than American employees, with robots then they're unlikely to open a new factory with many employees in the United States because the robots are even more economical here.

      They'll incorporate parts from China, which are now 140% the cost of what they were previously because President Trump wants that tariff really bad, and they'll charge you double and then multiply that by 1.4.

      I could certainly be wrong, since I never actually expected there to be a President Trump, but I suspect Trump will back off on implementing the tariff when someone with a brain, that Trump trusts, explains how starting a trade war with China would likely cause a recession and hang the blame for the recession on Trump, and then result in a Democratic president-elect in 2020. Of course, I wouldn't put it past him to implement the tariff in 2019, if it looks like he's going to lose anyway...

      Welcome to the new world, where we don't buy stuff from China anymore, and we still have no work, and we can't afford anything.

      President Trump's gonna make America Grate Again. Ouch! Here, hold my footgun.

      Indeed. I hope Trump isn't stockpiling those, for the sake of all Americans...

      --
      Fanatically anti-fanatical
  78. Perambulations and Commutations by fyngyrz · · Score: 1

    There is no possibility that a person might think a Trump proposal might actually have merit or at least be the least worse or two bad proposals.

    Oh no, there's a possibility. You know, if you're stupid.

    --
    I've fallen off your lawn, and I can't get up.
    1. Re:Perambulations and Commutations by drnb · · Score: 1

      There is no possibility that a person might think a Trump proposal might actually have merit or at least be the least worse or two bad proposals.

      Oh no, there's a possibility. You know, if you're stupid.

      Continue with such "inside the liberal bubble group think" and Trump will have a chance at re-election in 2020.

    2. Re:Perambulations and Commutations by crunchygranola · · Score: 1

      Maybe you can get the FBI director to break the law again violating the Hatch Act, and have FBI agent operatives violating their oaths leaking information to influence the election again. Trump desperately needed that illegal assist.

      More people voted for Clinton. Just like Gore. Republicans need corrupt government officials to win. And they say government is the problem. Ingrates!

      --
      Second class citizen of the New Gilded Age
    3. Re:Perambulations and Commutations by Anonymous Coward · · Score: 0

      I don't recall anyone bitching when the FBI director first came out saying "Hillary will not be prosecuted". I asked my friends why he was even opening his mouth, seemed wrong to mention possible ongoing cases at all, especially during elections season. They gave me a nice lecture on how he was just clearing the air of the unjust persecution of her.
      Of course, like you, when the worm turned a short time later they were berating him for opening his mouth again.

    4. Re:Perambulations and Commutations by drnb · · Score: 1

      The majority of the voters voted against Clinton. Plus both candidates focused on states to maximize the electoral count, not the popular count. You are just moving the goal post in frustration.

      Comey did not cost Clinton the election. One day he's a Democratic hero for announcing she was merely incompetent not criminal, another day he's a villain because he announces there is more evidence to look at. In your frustration you ignore the fact that Hillary's poor judgement got her there, having her own server in first place, delaying and obfuscating in the second place ... the investigation stretched into the final days of the election because of her actions. If she had just come clean and been more transparent it would have been all over long ago.

      Hillary lost because she neglected key states. She thought she had a "blue wall" and could spend her time elsewhere. That made voters in hard hit industrial portions of the country feel they were unimportant to her. Face such facts and stop looking for BS excuses. These excuses are just the talking points of the Democratic party establishment trying to save their positions of power, trying to deflect from the fact that they totally f'd up and misread the situation and steered the party in a losing direction. Or you can embrace their BS and continue misreading the situation and face similar results in 2020.

  79. You're pwned too. by Anonymous Coward · · Score: 0

    When you say "Our sysadmin is in Shanghai", what you really mean is "Our proprietary data is being shared all over China".

    You aren't even trying. I dearly hope your product is of no value, including not being usable (by finding or adding security holes) to compromise your customers.

    1. Re:You're pwned too. by ShanghaiBill · · Score: 1

      When you say "Our sysadmin is in Shanghai", what you really mean is "Our proprietary data is being shared all over China".

      Our sysadmin is in China. Our server is not. Besides, you only put stuff on a server if you want to share it. There is no reason to put proprietary data like source code on a server. Even if our source was disclosed, I really don't think anyone would be interested in it. Why would they?

  80. So $10? by RyanRife8866 · · Score: 1

    So it will jump from $5 to $10?

    1. Re:So $10? by sit1963nz · · Score: 1

      No, wages in China are 1/10 US wages, and that applies for maintenance of the factory, shipping of goods, etc etc etc

  81. Re:Disclaimers attempt to pre-empt racist accusati by EETech1 · · Score: 1

    Lawrence Lessig

  82. Re:So? No backup for Apple by EETech1 · · Score: 1

    Just think how smug they'll be after paying more for the only US made phone you can get.

    $10 a month to be able to look down on all the Android folks as not supporting the good old USA!

    Priceless to the clueless.

  83. Initially, sure. by Gumbercules!! · · Score: 1

    Certainly it will cost more, initially, as there's a lot of setup and time involved to get to scale. However, once the manufacturing is in place and operating at scale, costs will come down. Maybe never to the same level but down, none the less. Apple makes a huge profit on each device, so if they wanted to, they could double costs and still make a huge profit, which would improve over time as costs come down.

  84. People don't RTFA by melted · · Score: 1

    It's the CHINESE COMPANY that's looking into making phones in the US, not Apple itself. Apple itself doesn't make anything, and it hasn't for at least a decade. They design, market, sell, and support the product. Manufacturing is not among the things they do.

  85. Hey, Apple is happy about that! by garry_g · · Score: 1

    Caluclation is simple ...with their typical markup is - like - 200% (at least?), this means their profits will also double ... as the last thing Apple will do is take cuts in THEIR profits ... and the last thing most of the Apple fanboys and -girls is care about the price, as long as they have the latest iProduct, so ...

  86. Made in USA.. by Anonymous Coward · · Score: 0

    What exactly does this mean ? Make every component, or just the final assembly ? Why not just add a sticker or perhaps a small manual of one or two pages and pretend because that is made In USA, that's the part that counts.

    I can't believe how many have discussed costs of transporting components from china and have completely skipped the fact, those components themselves are not made in USA...

  87. Nikkei ALSO promotes business in China by Anonymous Coward · · Score: 0

    Starting no later than year 2000, Nikkei has been promoting building factories in China to Japanese companies.
    Many Japanese companies believed that and suffered massive losses due to copy products, demands for bribes, local government backed strikes for massive raise in wages, etc.

    Just so you know, Japanese investors use Nikkei to check if they are out of touch...by making sure that they are NOT doing what Nikkei recommends.
    You are free to listen to this article from Nikkei, of course.

  88. And if they paid taxes, it wouldn't. by Anonymous Coward · · Score: 0

    And if they paid taxes, it wouldn't.

  89. Re:Disclaimers attempt to pre-empt racist accusati by Coren22 · · Score: 1

    I was having a discussion with a friend over the weekend, and he complained about how racist Trump is, so I asked what exactly was so racist about Trump. The only things he could come up with was the wall with Mexico, and a Muslim registry. When I pointed out that Hillary was for the wall as a senator, he had no response to that.

    Why is it racist when Trump says it, but a great idea when Hillary does? Sexism.

    http://www.bing.com/videos/sea...

    As far as the registry goes, that has been in place for years, it isn't like Obama put a stop to it. Since 9/11, everyone entering the country (legally) registers at the border, and are fingerprinted and asked to give the address of their destination. How is it in any way different to somehow add that the person came from a Muslim country (which is already tracked!)?

    --
    APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?
  90. Re:Disclaimers attempt to pre-empt racist accusati by Coren22 · · Score: 1

    Also, I suppose I should point out that I think both Hillary and Trump are unworthy of being president, but it was inevitable that one of them would get elected. Frankly, none of the top four candidates were worthy in my eyes, but I voted Johnson as a tactical vote. Every vote for a third party means it is more likely that the main parties will drift in that direction in the next election cycle.

    --
    APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?