Don't Count on Moving iPhones' Production to the US Just Yet, Analysts Warn
Trump urges Apple to manufacture products domestically in the United States
A heads-up for Apple fans: don't expect the next iPhone you buy to be Made in the USA anytime soon. US President Donald Trump may be pressuring Apple to move its production to the US, but analysts are warning that the move could come at a steep price.
At the moment, Apple is shifting its production from China to India due to tensions with Beijing. Tim Cook, Apple's CEO, had mentioned in early May that most iPhones sold in the US would come from India in the current quarter. While Apple had already announced investments of over $500 billion in the US over the next four years and promised to create 20,000 new jobs, moving the production to the US might not be as straightforward as Trump makes it seem.
According to Dan Ives, an analyst at investment firm Wedbush, if Apple were to build its iPhones in a factory in, say, West Virginia or New Jersey, the price of a device would skyrocket to around $3,500. Moving just 10 percent of its supply chain to the US would take three years and cost the company a whopping $30 billion, Ives estimated on CNN news.
One of the main reasons for the high costs is higher labor expenses in the US compared to China. That's due to stricter labor laws and higher minimum wages, which will significantly drain Apple's profit margins if they move production to the US. The initial investment for infrastructure, including land acquisition, construction, and equipment setup, would be substantial as well.
In addition to the financial issues, Apple would also face logistical challenges, such as supply chain disruption, regulatory compliance, training and workforce development, scale and capacity, component availability, and technological and innovational challenges.
Trump's trade minister, Howard Lutnick, once stated that robots could replace human labor providing "millions and millions" of jobs in the US. While this sounds promising, the reality is far from that. Transitioning to robot-based production could be expensive and time-consuming, and creating a highly-skilled workforce capable of managing complex manufacturing processes would be another challenge.
In conclusion, while moving production to the US has its perks like having a factory closer to the market and potential quality control improvements, the costs and challenges associated with such a move would need careful consideration and strategic planning. Stay tuned for further updates on Apple's production plans and the potential impact on consumers.
- Donald Trump
- Apple
- India
- China
- Despite pressures from Donald Trump, the employment of Apple's production workforce might not be shifted to the US due to potential financial burdens, such as increased labor costs and massive investments required for infrastructure, causing the price of iPhones to rise significantly.
- Regarding the community policy, industry analysts suggest that, for Apple, the employment policy shift to the US might involve logistical challenges and technological hurdles, possibly taking years and incurring massive financial losses, such as the $30 billion estimated just for moving 10% of supply chain to the US.
