What features are you hoping to see in the new iPhone? USA TODAY’s Jefferson Graham provides his wishlist for Tim Cook and Apple.
Would you willingly spend $2,000 to buy an iPhone that today costs a grand?
That’s how much veteran analyst Tim Bajarin tells me it would cost Apple to retail if it made iPhones in the United States.
I bring this up as a backdrop to a current back and forth between Apple and President Donald Trump. Apple is concerned the prices we pay here in the United States for many of its products would go way up because of the tariffs Trumps has enacted on the import of goods from China.
To which Trump says he has an easy solution: Build factories in the USA, and make iPhones here, instead of China. “There would be zero tax and indeed a tax incentive,” the president wrote on Twitter.
I get where Trump is coming from. Give me one good reason a California company can’t make their most popular product in their own backyard. Why shouldn’t Apple makes iPhones here?
Well, here’s the problem. It’s not just money.
Yes, there’s way lower labor costs involved. Skilled workers in China make about $100 a week, way less than we offer. There’s also the availability of parts in Asia and the lack of suitable manufacturing facilities here.
Think about the parts dilemma for a second. Remember that Apple makes more than 200 million iPhones yearly and has to come up with OLED screens, camera sensors, solid state storage drives and the like to put into every one of them.
These are all made-in-Asia products.The reason the launch of the iPhone X was delayed in 2017 to November from September was the scarcity of the OLED screens. Apple couldn’t get enough of them for the phone, and it took time to get factories up to speed.
“We lost manufacturing to Asia, Southeast Asia, India and Mexico two to three decades ago, and it’s never coming back,” Bajarin told me recently,
Apple’s not alone. Cameras have been made in Asia for decades, Samsung creates its Galaxy phones in South Korea, Vietnam and India, Amazon gets Echo speakers made in China and Google gets the Pixel phone made in South Korea.
That said, I’m a big believer that if Apple wanted to get the majority of its parts assembled here, it could do it. This is Apple folks. Is there any young company out there listening that wouldn’t want to retool and become a major Apple supplier?
Apple’s Tim Cook has said workers in China are trained at how to handle the assembly of products like the iPhone in a way that our universities don’t do here. To which I have said, open an Apple University and change our culture. This is a company with about $250 billion in the bank. I’m sure that if Apple wanted to invest in American workers by funding and opening a trade school, thousands would apply. Especially with the caveat of a good, steady job after completion of the program.
I think the American consumer would have a tough time forking over $2,000 for an iPhone, but what are they going to go – all suddenly switch to using Samsung phones? Granted, Samsung sells more phones yearly, mostly lower-priced models in developing countries, but the iPhone is the best-selling consumer device, hands down.
I’ve suggested in the past that Apple could offer a special, more expensive, “Made in the U.S.A.” edition of the iPhone (in red, white and blue colors, perhaps) throw a giant ad campaign against it, and people, especially in the Red states, would eat it up. The Asian version would still greatly outsell it, because of pricing, but it’s certainly something worth trying.
Finally, it should be noted that Apple says it’s the largest U.S. taxpayer, and that it’s investing $350 billion in the economy over the next five years by building data centers and more in North Carolina, Oregon, Nevada, Iowa and Arizona.
Readers, feel free to weigh in on the comments. I’d love to hear what you have to say. Look for me on Twitter, where I’m @jeffersongraham
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