Apple is not the top seller of smartphones in the world — not even close. It does, however, have the vast majority of smartphone profits in the world with an estimated 90%. The margins on Apple’s hardware are so large that it can out earn OEMs that sell several times as many phones. There’s been a lot of talk about encouraging the manufacturing of electronics in the US with the incoming Trump administration, but is it even feasible to build an iPhone in the US? If Apple built them in the US, would that really create many jobs?
It is estimated that the iPhone 7 costs about $400 for Apple to produce. It sells for $649 in the US. A large chunk of the cost of making the phone has to do with getting components to the factories in China’s Zheng.
The NY Times has an excellent report on why Apple ignores America when it comes to making the iPhone and how that’s better for Apple.
Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones. The company’s analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States. In China, it took 15 days.
Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones. The company’s analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States.
In China, it took 15 days.
That flexibility, speed and scale in factory workers just doesn’t exist in the US. Apple says it “shouldn’t be criticized for using Chinese workers” because “the U.S. has stopped producing people with the skills we need.” There just aren’t enough skilled workers in the US that have that inbetween degree of high school and college. That’s what Apple wants in its factory workers and that’s what China gives ’em.
