Trump's Assault on Apple: The Real Cost of an American-Made iPhone
Cost of a U.S. iPhone Revealed
By Christina Lohner
The old-school feud between US President, Donald Trump, and Apple CEO, Tim Cook, heats up. Trump's insistent calls for "Made in USA" iPhones are pushing prices sky-high for many consumers, and it ain't pretty.
In the ongoing tussle over iPhone production, Trump doesn't mince words, "I had a bone to pick with Tim Cook." The root cause? Apple's reluctance to manufacture a sizeable chunk of its iPhones in America. The tag on an iPhone hailing from West Virginia or New Jersey would burn a hole in your wallet, multiple times over the current price.
Economy Economist Dismisses American Revival: "A Pipe Dream" Setting its sights on the fall release, Apple toys with the thought of a price hike, as per 'Wall Street Journal' sources. This price bump, however, wouldn't be a product of Trump's tariffs but rather the addition of new features and swanky design elements. Yet, analysts argue such a move could cost Apple a chunk of its market share. A sales plunge looms if Apple succumbs to Trump's pressure.
Apple's usual price range for its devices is between $600 and $1,200. Dan Ives from Wedbush Investment Firm, went on CNN to stake his claim, estimating that a completely domestically produced iPhone could set you back a whopping $3,500. Apple has perfected the most intricate supply chain over the years, requiring monumental changes to shift even 10 percent of it from Asia to the US, costing $30 billion and a grueling 3-year stint.
The Fine Print: Up to $3,500
If Apple stuck to its 46 percent margin, the tech portal Golem.de crunches the numbers to yield a potential price tag of $3,500 for an American-made iPhone. Considering only the absolute value of the current $560 for the iPhone 16 Pro Max, the American iPhone would cost around $2,560 to $2,960, based on estimated manufacturing costs ranging between $2,000 and $2,400. Even that might be a cheaper bet for Apple, since it'd be cheaper to bear the import tariffs itself.
The Impossibility of American Manufacturing
Unfortunately, the prospect of domestic iPhone manufacturing is more pipedream than reality. Apple has already diversified its supply chain to Vietnam, India, and the United States. However, the majority of its components are still sourced from China, according to Ives' calculation.
Economy Apple's Costly Tangles: Tariff Threat Hangs Over Like a Sword Building a U.S. factory would take at least four to five years, according to the analyst, not to mention the necessary infrastructure and workforce aren't readily available. All told, it would take seven to eight years to churn out an iPhone in the U.S., Ives estimates.
India: The Rising Tide
Apple's focus shifts towards India as a vital new manufacturing hub. Cook recently announced that most iPhones sold within the US are expected to hail from India this quarter. The push to find alternative production sites away from China began years ago due to geopolitical tension and the threat of a trade war and a looming invasion of Taiwan. As early as two years ago, the goal was for a quarter of all iPhones to be manufactured in India, according to WSJ intel.
In recent years, Apple has expanded its production capacity with contract manufacturers in India and Vietnam. Today, the entire model range can be assembled in India. However, most iPhones are still manufactured in China.
Economy Apple Takes a Dive in China: Plummeting Market Share Each year, Apple sells more than 230 million iPhones, with these smartphones being highly popular in the US and the UK. The US company peddles over 60 million iPhones on home turf annually.
A False Dawn
Even if a profusion of applicants appeared, they'd first need to undergo intensive training for industrial production. "The US economy isn't built for assembling mobile phones," Apple supply chain expert Fraser Johnson from Canada told the Guardian. "They don't have the facilities or the flexible workforce – training 200,000 to 300,000 people to assemble iPhones is simply impractical."
Instead, the US government is mulling over the idea of robots. Yet, according to Bloomberg's insiders, the supply chain experts and people familiar with Apple's production, this isn't realistic due to the constantly changing nature of iPhones.
Analyst Ives wraps up the idea of U.S. manufacturing as a tall tale. "It's a fictional story."
- The community policy should address the potential economic implications of manufacturing policies, such as the proposed move by Apple to produce iPhones in the United States, as the cost of an American-made iPhone could dramatically increase under the current employment and finance regulations.
- The employment policy must consider the potential impact on job creation if Apple were to shift a significant portion of its iPhone production to business hubs like India, while factoring in the challenges of robotics and the need for flexible workforces in technology-driven industries like smartphones and gadgets.
- In the ongoing debate about employment policies and technology, it is crucial to examine the long-term effects of relying on robots for manufacturing processes in the face of changing technology, as the complex nature of smartphones and gadgets might render automated production impractical or inefficient.
