Here's how much a 'Made in the USA' iPhone would cost
By: Kif Leswing (CNBC)
Is my heart supposed to bleed for the 1%? Just because Apple doesn't know how to design for efficient manufacturing doesn't earn much sympathy. .
If iPhones were really so technically sophisticated then why does production depend upon cheap, unskilled, subsidized labor? Screwing tiny screws is not a high skill job. You'd think that manufacturing an iPhone would be too difficult a task for unskilled workers who are paid slave wages. But, apparently, thousand of Chinese workers performing menial work in a sweat shop environment is a model for the progressive left.
The biggest cost in producing an iPhone is Apple's proprietary operating system and software. Apple charges a premium price for its intellectual property, not for the hardware. It's the California Coders that add so much to the cost of an iPhone. Obviously they don't know anything about manufacturing since they've run to China for subsidizes, kickbacks, and labor that's cheaper than automation. These brilliant Apple engineers can't even design an iPhone that can be repaired.
And more salt for the open wound is that Apple obtained approval for 3,873 H-1B visa workers through 2024. So, Apple operations inside the United States even sells out American workers.
iPhones are just another example of poorly designed, overpriced Chinese trash dumped onto the United States so the 1% can cheat both Chinese workers and American consumers while dodging taxes.
S E E D E D C O N T E N T
When President Barack Obama asked the late Apple CEO Steve Jobs about making an iPhone in the U.S., Jobs didn't mince words.
"Those jobs aren't coming back," Jobs said at a dinner with Obama in 2011.
The president of the U.S. and the CEO of Apple have changed, but the ambition of a "Made in the USA" iPhone remains.
Defending its "reciprocal tariffs," the White House this week said President Donald Trump believes the U.S. has the workforce and the resources to build iPhones in the U.S. Apple CEO Tim Cook nor anybody else at the tech company has come out to back that claim, but analysts who follow Apple say the idea of an American-made iPhone is impossible at worst and highly expensive at best.
As it's largely a theoretical exercise, there's a broad range of guesses as to how much an all-American iPhone might cost.
Bank of America Securities analyst Wamsi Mohan said in a Thursday note that the iPhone 16 Pro, which is currently priced at $1,199, could increase 25% based on labor costs alone. That would make it a roughly $1,500 device.
Wedbush's Dan Ives pegged $3,500 as the U.S. iPhone's price shortly after last week's tariff announcement, estimating that Apple would need to spend $30 billion over three years to move 10% of its supply chain to the U.S.
At the moment, Apple makes more than 80% of its products in China. Those products now receive a 145% tax when they're imported into the U.S. after Trump's tariffs went into effect this week.
Experts say that a "Made in the USA" iPhone would face serious challenges, ranging from finding and paying a U.S. workforce to tariff costs that Apple would incur importing parts to the U.S. for final assembly.
There's broad agreement among analysts and industry watchers that it's not likely to happen. Wall Street has doubted for years that Apple would do an American iPhone. "I don't think that's a thing," Needham's Laura Martin quipped on CNBC this week.
"It's just not a reality that on the time frame of imposing tariffs that this is going to shift manufacturing here. It's pie in the sky," said Jeff Fieldhack, research director at Counterpoint Research.
A man checks an iPhone 16 Pro as the new iPhone 16 series smartphones go on sale at an Apple store in Beijing, China September 20, 2024. Florence Lo | Reuters
Apple designs its products in California, but they are made by contract manufacturers, such as Foxconn, the company's top supplier.
Even if Apple spent heavily to get Foxconn or another partner to agree to build some iPhones in the U.S, it would take years to construct the plants and install the machinery, and there's no guarantee that U.S. trade policy might not change yet again in a way to make the factory less useful.
The biggest issue with Uncle Sam's iPhone is that the U.S. doesn't have the same workforce as China - though the massive number of workers needed to build iPhones is one of the attractions for the Trump administration.
"The army of millions and millions of human beings screwing in little screws to make iPhones, that kind of thing is going to come to America," Commerce Secretary Howard Lutnick said on CBS on Sunday.
Foxconn builds iPhones and other Apple products in massive campuses that include dorms and shuttles. Workers often travel from nearby regions to work at the plant for short periods, and employment surges seasonally in the summer before new iPhones come out in the fall. The well-oiled system helps Apple pump out more than 200 million iPhones per year.
Additionally, Foxconn over the years has come under scrutiny for worker conditions many times, including in 2011 when the company installed nets around some of its buildings after a rash of worker suicides. Oversight groups have said that Foxconn's work is grueling and that workers are pressured into working overtime.
Despite working conditions, Foxconn hired 50,000 additional workers at its biggest factory in Henan to build enough iPhones ahead of the latest models' September launch, Chinese media reported last fall.
But Chinese workers get paid far less than American workers. The hourly wage during the iPhone 16 surge was 26 yuan, or $3.63, with a signing bonus of 7,500 yuan, or about $1,000, according to the South China Morning Post. For comparison, the minimum wage in California is $16.50 per hour.
Bank of America Securities' Mohan estimated on Thursday that the labor cost for assembling and testing an iPhone in the U.S. would come in at $200 per iPhone, up from $40 in China.
Apple CEO Cook has also said that another issue is that American workers don't have the right skills. In a 2017 interview, Cook said there aren't enough tooling engineers in the U.S. Those engineers work on and configure the machines that take the sophisticated designs from Apple, which come in the form of computer files, and transform them into physical objects.
"The reason is because of the quantity of skill in one location, and the type of skill it is," Cook said when asked at a conference why Apple does so much production in China.
A meeting of tooling engineers in China could fill "multiple football fields," but in the U.S., it would be hard to fill one, Cook said.
The most recent effort to have Foxconn move significant production to the U.S. was a failure.
Trump announced a $10 billion investment from Foxconn to build plants in Wisconsin in 2017. Apple was never officially attached to Foxconn's Wisconsin location, but that didn't stop Trump from claiming Apple would build three "big beautiful plants" in the U.S.
Foxconn changed plans several times for what the Wisconsin plant would produce, but it eventually settled on making face masks during the pandemic - nothing electronics related. The Foxconn Wisconsin plant was pitched as delivering 13,000 jobs, but it only created 1,454 jobs.
During the pandemic, plans for the plant were abandoned, and most of the facility remains unbuilt.
Apple worked with Foxconn in 2011 to expand iPhone production to Brazil to avoid large import duties in that country. The plant is still operational today, and will produce iPhone 16 models to help Apple get around U.S. tariffs, according to recent Brazilian media reports.
But even after the $12 billion factory was operational, most components were still imported from Asia, and in 2015, four years after the plant was announced, the iPhones made in Brazil retailed for twice the price of iPhones made in China, according to Reuters.
However, recent efforts by Taiwan Semiconductor Manufacturing Co., Apple's main chip manufacturer, have been successful. TSMC now makes small quantities of cutting-edge chips at a new factory in Arizona, and Apple's a committed customer.
Apple CEO Tim Cook escorts President Donald Trump as he tours Apple's Mac Pro manufacturing plant with Treasury Secretary Steven Mnuchin looking on in Austin, Texas, November 20, 2019.Tom Brenner | Reuters
Even if iPhones could be assembled in America, much of what goes into an iPhone comes from countries around the world, all of which have received tariffs.
The vast majority of parts in an iPhone are made in Asia. The processor is manufactured by TSMC in Taiwan, the display is produced by South Korean companies like LG or Samsung, and the majority of the other components are made in China.
Apple would face tariffs on most of those parts, according to Mohan of Bank of America Securities, unless it could secure waivers for individual parts. Semiconductors, which are among the most valuable parts inside an iPhone, are exempt from tariffs at the moment.
Trump on Wednesday put a 90-day pause on most of his tariffs, but if the pause comes to an end, a Yankee-made iPhone 16 Pro Max could increase in price by 91% thanks to tariffs and increased labor costs, Mohan wrote.
"While it may be possible to move final assembly to the U.S., moving the entire iPhone supply chain would be a much bigger undertaking and would likely take many years, if even possible," Mohan wrote.
Though Jobs shut down the idea of an America iPhone flat out with Obama, Cook hasn't taken the same unvarnished approach.
Instead, Cook has led Apple's strategy to engage with Trump, including attending his inauguration in January. Apple also announced that it will spend $500 billion within the U.S., including on some AI server production in Houston. Trump regularly cites the investment with approval.
During the first Trump administration, Cook's strategy worked.
Although Trump talked about stars-and-stripes iPhones and Apple building plants in the U.S., the tech company was able to secure temporary exemptions for many of its products made in China. That meant Apple didn't have to pay tariffs on important devices like the iPhone.
The charm offensive during Trump's first term culminated in the fall of 2019 when Apple extended its commitment to assembling the $3,000 Mac Pro in a Flex factory outside Austin, Texas. Trump toured the factory with Cook.
Before Apple commits to a red, white and blue iPhone, it may produce some lower-volume products or accessories in the U.S. to charm Trump, Wall Street analysts say.
"Given we now know that the Trump administration is willing to negotiate, we wouldn't be surprised to see Apple commit to some small-volume production in the US (HomePod? AirTags?), similar to its September 2019 commitment to manufacture the new Mac Pro in Austin, TX, to try and win an exemption," Morgan Stanley analyst Erik Woodring wrote in a Thursday note.
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Apple exploits Chinese workers, Apple exploits the US telecom infrastructure, Apple has duped American consumers into paying premium bucks for a Swoosh.
Poor Tim Cook. How's a flimflam artist supposed to make a buck on a level playing field? The progressive left's hearts bleeds for the 1% victims of Make America Great Again. Cry for the billionaires; they're being treated so unfairly.
Having been living here in China for almost 19 years I'm particularly amused by the use of sensationalistic language when describing Chinese labour: "slave wages", "sweat shop environment", "labor cost cheaper than automation", "overpriced Chinese trash dumped". Although there might have been some truth a number of years ago about worker suicides, there is no way that the Chinese government could allow such conditions to continue that would cause that, if for no other reason, the reputation of the Chinese government.
Yes, workers get paid less than American workers, but the cost of living in China is a fraction of what the cost of living in America is. As well, it took 10 years for China to eradicate abject poverty, so in China people don't live on the streets or under bridges, not just because of the eradication, but also because the culture in China is different than in America in that there is a family cohesiveness besides the being concerned about others more than one self. While the world may wonder at why there are about three quarters of a million homeless people in the USA, the land of opportunity where the streets are paved with gold, just wait to see the result of the rising costs coming because of Trump's tariffs that will increase that number for sure.
I won't mention how migrant workers in farms, meatpacking plants and fruit orchards have been treated in America, because that would be "whataboutism" wouldn't it.
You failed to mention that China subsidizes business. The Chinese government subsidizes factory construction, labor costs, and even profits. Businesses are not required to pay higher wages or provide benefits because the Chinese government is 'alleviating poverty'. China can undercut domestic production in the United States through currency manipulation, government subsidies, and government ownership of businesses. China is not a market driven, capitalist country. And Chinese government policy really is created for the purpose of using the conditions of governance in market countries as an economic weapon.
Why would American investors be attracted to China? We're hearing that Chinese workers are paid less which means they can only purchase less. We're hearing about large numbers of unskilled Chinese workers whose jobs in the west would be automated. No one is claiming that China can do the work better; the argument has been that China can do the work cheaper. And China has to contend with shipping manufactured goods over 10,000 mile with specific protections against a damaging ocean environment. No, the appeal of China to American investors is more fundamental; China actually pays investors to open shop in China. The way the Chinese government manages and manipulates their industrial economy would be illegal in the United State. The fact that those government practices are legal in China means that China and the United States are not competing in a fair, equitable manner. China exploits it's ability to legalize what the United States can't.
Yes, the progressive left in the United States has emphasized college education. That liberal policy has devastated the labor market in the United States and created a society of 'haves and have nots'. The progressive left of the United States has created a workforce that doesn't want to do factory work; they want to do executive type work for higher pay. That is what the progressive left promised. That's why students have been suckered into a lifetime of debt to obtain a college education.
The United States has become dependent upon cheap foreign labor because the progressive left has established higher expectations from the home grown population. The progressive left has fostered a society that exploits cheap labor for fun and profit.
I'll assume you won't admit that American municipal or State governments offer tax holidays for industries to locate in their back yard, or that EVs or developing of computer chips have enjoyed American government subsidies. What's the word for accusing others of something one does themselves? And, if it's only migrants who acquiesce to doing menial jobs because American citizens only want executive positions then why cull the migrant workers?
I do agree that Chinese workers have insufficient protections - something I've witnessed personally.
By the way, is it upsetting that Trump has awarded China by now exempting smartphones, computers and semiconductors from the tariffs, which guarantees that the Chinese workers will NOT be released from being chained to their worktables 20 hours a day, as your article seems to suggest.
The 20% tariffs still apply
Okay, well it doesn't affect me.
Local and state governments foregoing taxes on business isn't a subsidy. Wasn't the economic lesson of tariffs that a tax on business is actually a tax on consumers? That seemed to be the dominant argument.
Besides, China won't pay the tariffs. The tariffs are paid by businesses importing from China. Imposing a tax on US businesses (and consumers) won't cost China anything. So why is China upset?
Because the US government can't afford to provide basic income for those who lost their jobs to illegal immigrants. At one time, construction work was middle class work. Mechanics and construction methods were actually taught at the high school level. There were a number of labor unions for the various construction trades. The progressive left destroyed that ladder out of poverty by making college education the goal.
Are there Chinese trade schools to teach workers how to screw tiny screws?
You just ended the discussion on this matter.
My point is that Chinese workers do not need college degrees to perform manufacturing jobs. The progressive left created the expectation that college education provides a pathway out of poverty. Now student debt has become an obstacle to achieving a middle class lifestyle.
As the industrial economy of China shows, it is jobs that provide the pathway to a better life. Don't claim the United States cannot achieve economic growth and prosperity by revitalizing domestic manufacturing. The elite of the interconnected global order have created a system of economic development through industrialization to alleviate poverty in the third world. If that economic approach will work for the third world then it should provide even greater benefit in the US economy.
Is it your opinion that Apple could manufacture iPhones in the USA at the same or similar cost per unit?
Apple could produce cheaper iPhones anywhere in the world by designing the phone for automated manufacturing. That's what happened to the watch industry during the 19th century. The master craftsmen who screwed the tiny screws were made obsolete by designs that allow mechanized manufacturing.
Apple could producer cheaper iPhones in the United States by designing for manufacture in the United States. But everyone should be aware that a big chunk of the cost for producing iPhones is the software which is already being produced in the United States (by H-1B workers).
I think that it is possible to manufacture i-phones for the same price, but the process would not involve people, and thus would not give the President the jobs that he wants to come from manufacturing. Assuming that he gives a shit.
I think it is possible too. But there is a reason why Apple chose to go overseas rather than build with a high-tech, robotic factory.
The likelihood that they will build such a factory in the USA is quite remote. Also, there would be a serious retooling of the supply chain.
Not likely.
Trump said his name is Tim Apple.
The dominance of Apple phones is a great marketing achievement. Android phones do almost everything I phones do, and are generally cheaper. All my phones have been Samsung.
Is your nick name "fire starter"?
/s
read an article about a week or two ago that stated the latest apple iphone 16 pro , was slated to cost $11-1200 USD before the tariffs, with the tariff at that time the price would have been jacked up to $3500 US , dont even want to know what it would be with the new tariffs.
I will stick with my cheap ($50 ) Samsung Wally world specials , they have served well for the past 5 years , only had to replace the first one because i obliterated the screen on my first one, being ran over doesnt do well .
People that own Iphones are already used to paying way too much, another 25% should be easy.
Now Trump supporters try to rationalize unnecessary price hikes. Instead of criticizing Trump for doing the opposite of why he was elected, we see feeble, tacit admission that he is indeed causing price increases but dismiss this as no problem … nothing to see here.
Just pathetic.
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Yes, you should do that because there are too many comments from Trump supporters that are beyond ridiculous. Normal sarcasm assumptions do not work nowadays.
So if you are actually trying to be sarcastic, I recommend you note it.
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They work fine for me
Well for people responding to your and other Trump supporter / apologist comments, it would be best to be clear when you are trying to be sarcastic.
When a poster claims that the rebound on the stock market after Trump backed down from his tariffs is evidence that Trump is winning do you consider that to be sarcasm?
Do you recognize how insane such a comment is? That was a serious comment. So how in hell are rational people supposed to know when a Trump supporter / apologist is being sarcastic?
Thank you for your opinion, as incorrect as it may be.
Has life improved since Nixon opened trade with China, or not?