The White House is insisting that Donald Trump’s vision of Apple’s flagship iPhones being manufactured in the US will come to fruition, despite assertions from analysts and the company itself that it would not be possible.
The press secretary, Karoline Leavitt, told reporters during Tuesday’s briefing that the president believed Apple’s recently announced $500bn investment, as well as increasing import costs sparked by his trade tariffs, would encourage the company to ramp up manufacturing in the US.
“He believes we have the labor, we have the workforce, we have the resources to do it. If Apple didn’t think the US could do it, they probably wouldn’t have put up that big chunk of change,” she said.
Last I saw it was reported around 17 hours per phone on labor. They won’t get away with less than $20/hr plus benefits here. So that’s around $22.50/hr. ~$380 of labor per phone just on construction. Every individual part/material will have to pay a tariff coming into the country as well unless you are going to make those here as well at the higher costs. 100% of their profit margins would be eaten up. So there are 2 options, raise the price by 50% to keep their profits, or exploit cheap labor elsewhere. They made their choice to move to India previously and India faces a 27% tariff. They keep their profits higher and prices lower by not moving manufacturing of the phone here.
Even then, they moved some of their iPhone operations to India, and they had to scale back plans because the Indian workforce doesn’t have the skills needed to perform the work, and getting a made in India iPhone is pretty much a marker of getting a lemon. Significantly lower quality control, significantly higher tolerance for defects.