Apple could bring back the manufacturing of its iPhone to the US, a big deal for the country - and according to unnamed sources of Nikkei, Apple asked both of its manufacturing partners in Pegatron and Foxconn on ways of bringing iPhone production back to the USA.
Nikkei's sources said: "Apple asked both Foxconn and Pegatron, the two iPhone assemblers, in June to look into making iPhones in the U.S. Foxconn complied, while Pegatron declined to formulate such a plan due to cost concerns". Another source said that Foxconn boss Terry Gou "had been less enthusiastic due to an inevitable rise in production costs", adding: "Making iPhones in the U.S. means the cost will more than double".
Where did this all come from? Well, considering President-elect Trump has placed Apple front and center during his rallies about hoarding cash overseas and throwing all of its manufacturing out of the United States, he pledged he would make the tech giants manufacture their products in the US - which will significantly boost employment numbers. In January, Trump said: "We're going to get Apple to build their damn computers and things in this country instead of in other countries".
I don't know how that's a bad thing, more jobs for Americans is good, right? But it'll make iPhones and other US-made electronics more expensive! Well, if that's the price we have to pay - I say we should do it. Heck, the total BOM (bill of materials) of the new iPhone 7 is just $225... so surely the rest of the price past $1000 is distribution, profits, marketing, and more. Apple could take a hit with profits per iPhone sold, to offset the increased manufacturing costs within the US.
But it was a statement by The Wall Street Journal that had me iffy on the subject, where the outlet talked about Apple bringing back manufacturing of the iPhone to the US. The WSJ said: "When Jabil Circuit Inc., the world's third-largest contract manufacturer by revenue, needed to quickly ramp up production of its electronics components a few years ago, the company was able to add 35,000 workers in China in less than six weeks".
They continued: "In no other country can you scale up so quickly," said John Dulchinos, vice president of digital manufacturing at Jabil, a St. Petersburg, Fla., supplier to companies such as Apple Inc. and Electrolux SA. "You have the ability to move quickly and there's a really strong electronics supply chain in Asia centered around China".
But the Journal did have a good point about the future of manufacturing, saying: "some manufacturing jobs done in China with human labor could be lost to machines if production moves back to the US". Now that part, I totally agree with. Automation is going to roll through manufacturing jobs like a steamroller in the coming decades, and that's something that not only Apple has to think about, but the US, and other countries around the world - and most of all, anyone looking at a job in the manufacturing and production of anything in these facilities.
Apple boss Tim Cook doesn't like the idea of manufacturing iPhones in the US, as he agrees with many economists that the vocational skills required for Apple manufacturing don't exist in the US. Really? There aren't enough Americans with the skills to manufacture an iPhone in the US? I highly doubt that.