As the possibility of being subjected to steep tariffs on imports of products manufactured abroad solidifies amidst an unconventional presidential election, Apple has been investigating ways to comply with the pending regulations of a new government while trying to keep its own costs down and profits up.
To that end, according to a report published earlier this week by Business Insider, Apple has instructed its primary iPhone-manufacturing partners, Foxconn and Pegatron, to begin exploring the logistics and feasibility of manufacturing its iPhone right here in the good ole’ United States of America.
The report comes in the wake of exclusive interviews between Business Insider and constituents with deep ties to Apple’s Far East supply chain, according to an earlier report published in Japan’s Nikkei Asian Review journal.
The Nikkei report indicated that while both Foxconn and Pegatron have begun forming an action plan, both supply chain partners remain lukewarm on the prospect of an iPhone that’s truly ‘Made in America’ — simply because, as Foxconn Chairman Terry Gou notes, the sheer rise in production costs would be crippling.
However, other top-level supply chain executives — namely, Sharp Display Company President Tai Jeng-Wu — suggested that perhaps certain parts of the iPhone, but likely not the whole unit, could be manufactured stateside one day.
“We are now building a new [OLED] facility in Japan. We can make [OLED panels, a kind of screen] in the US too,” Jeng-Wu indicated in a report published earlier this month. “If our key customer demands us to manufacture in the US, is it possible for us not to do so?”
There are obviously several reasons why Apple could be considering an iPhone that’s ‘Made in America’. However, chiefly among them would be current President-elect Donald Trump’s vow to mandate that Apple begin manufacturing its most popular devices on American soil — lest the company be slapped with steep import tariffs.
At a presidential campaign rally earlier this March, Trump famously pledged that, “I’m going to get Apple to start making their computers and their iPhones on our land, not in China.. How does it help us when they make it in China?”
Of course, as most analysts would agree, the cost of producing an iPhone in America would, at the least, double the handset’s price right out of the gate. But there are also other, logistical problems to factor in, as well — including the difficulty coordinating Apple’s vast, Far East supply chain with a new supply chain established here in the U.S. In other words, it would be incredibly costly, if not almost impossible, to ship some of components across the Pacific Ocean, at the last minute, just to be tendered by U.S. workers.
As Columbia University economics professor, Amit Khandelwal, noted, “A large part of the reason electronics moved overseas is because of the entire supply chain over there. It may be a lower cost to produce the final product as compared to the US, but there’s also an advantage is that you’re close to your other input suppliers who are other parts of the East Asia supply chain.”
One final bit worth noting is that, even if Apple were to decide upon making an iPhone, or a portion thereof, here in the United States, most if not all of the company’s U.S. manufacturing operation would be robotized — meaning that Apple would more than likely rely on automated manufacturing, thus dumping an icy bucket of water on Trump’s hopes of creating more Apple manufacturing jobs in America.
Would you pay double the price for an iPhone that’s ‘Made in America’? Let us know in the comments!
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