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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.
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
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...
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?
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.
Allowing external forces to decide what a healthy / acceptable profit margin can be is the surest way to destroy capital investment by businesses.
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
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.
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.
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
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.
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.
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.
no they where not able to find industrial engineers willing to work 60-80 hours a week for $32K a year.
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.
The USA is producing college graduates with massive debt who can't afford to take normal jobs.
No sig today...
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.
Someone had to do it.
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
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
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.