During his campaign, Trump suggested that his administration could potentially get Apple to build their computers and devices in the US instead of other countries. Nikkei Asian Review reported last week that Apple assembler Foxconn has actually been studying the possibility of moving iPhone production to the US. But a source told Nikkei that the cost of an iPhone would “more than double” if that were to happen.
An evaluation by Marketplace looked into the hypothetical cost of an American-made iPhone, and came up with a similar estimate. If all the components were made in the US, they suggest, that could push the cost up to $600, which would mean the phone could retail for as much as $2000.
According to a different analysis published in the MIT Technology Review, if iPhone assembly were done in the US but the components were still sourced globally, the cost of making phones (currently estimated at about $230) would rise about 5%. However, if the components were made in the US (with raw materials bought on the global market), that would add an additional $30 or $40 to the cost of making the device, an increase that would then be reflected in retail markups.
Dan Panzica, chief analyst at IHS Markit Technology’s Outsourced Manufacturing Intelligence Service, suggests these estimates all overlook a bigger problem.
“The thing that people miss regarding bringing something that’s a high-volume product like any phone to the US is, Where are you going to get the people?” he says. Panzica, who used to work at Foxconn, estimates that the Chinese workforce required to make the components and assemble the phones totals over 150,000.
“If you take all the people at GE, GM and Ford, it’s still 20% less than at the four Foxconn factories,” he says. “What city could support a factory of 60,000 people?”
Plus, Panzica adds, the infrastructure for these types of electronics was never in the US to begin with, so the concept of bringing it back would actually involve building from scratch the entire manufacturing network that has grown in Asia over the last few decades.
“To rebuild that kind of infrastructure in the US will be really really hard,” he says.