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.
I’m not sure how much of their profit margin Apple would give up. It depends on how much phone sales slow down when prices go up. Is the cell phone market elastic or inelastic?
The labor is 2.5x more expensive than minimum wage. Do you think Apple will have minimum wage workers doing relatively skilled labor like soldering and assembling electronics? I’ll likely be more in the $15-$20/hour range before even looking at benefits. I don’t know how many person hours go into assembling a phone, but it’s not just a few. That alone would probably add a few hundred to every phone.
Like you said, the most expensive portion is not the labor, it’s the parts that are mostly sourced from China and Taiwan… which have huge tariffs in the scenario Trump is talking about.
Regarding the labor costs, consider that you can go work in an Amazon warehouse and make ~$22 an hour for essentially unskilled labor.
Maybe working on an American Foxconn plant would be more desirable (I have my doubts) but I still couldn’t see the labor cost being less than $25/hr at a bare minimum