Drudge Retort: The Other Side of the News
Thursday, September 13, 2018

Trump says Apple should just build plants in America.

I tried to figure out what that would entail. The issue is not so much cost of putting an iPhone together, or even the cost per part on paper.

The issue is skill, scale, expertise, and infrastructure -- all of which require money, time and long-term investment. Unlike other manufacturing jobs that have migrated from the United States, Apple wouldn't be bringing them "back" so much as starting from scratch.

The cost would come in attempting to build a system that's never been in the US, but has been built over decades abroad. And even if Apple could somehow manage to bring the whole process to the United States, at a huge cost, there might not even be much of an advantage in terms of global trade.

China makes only about $8 per phone, so placing Apple and its supply chain in the midst of the US-China trade dispute just isn't that smart.

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It's tempting to assume that the reason Apple assembles its phones in China is cost. After all, the minimum wage is a fraction of what it is in the United States. But that doesn't explain why, then, Apple doesn't go somewhere even cheaper. Why aren't iPhones built in, say, Nicaragua, where labor is even less expensive? The answer is skill.

Apple CEO Tim Cook said last year that he needs a "rare" combination of craftsman-like skill, sophisticated robotics, and computer science. That combination is a system that's been built over time in countries like China that have made the investment.

"There's a confusion about China," Cook said. "The popular conception is that companies come to China because of low labor cost. I'm not sure what part of China they go to, but the truth is China stopped being the low labor-cost country many years ago.

And that is not the reason to come to China from a supply point of view. The reason is because of the skill, and the quantity of skill in one location and the type of skill it is."

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About $2 more.

#1 | Posted by Sniper at 2018-09-13 02:33 PM | Reply

"There's a confusion about China," Cook said. "The popular conception is that companies come to China because of low labor cost. I'm not sure what part of China they go to, but the truth is China stopped being the low labor-cost country many years ago."

NW

#2 | Posted by eberly at 2018-09-13 02:44 PM | Reply

"About $2 more."

Flag: DTRFA

#3 | Posted by Hagbard_Celine at 2018-09-13 03:11 PM | Reply


@#1 ... About $2 more. ...

From the cited article:

...If Apple managed to bring manufacturing jobs to the United States, analysts say that assembling the iPhone here wouldn't actually make it much more expensive. As Konstantin Kakaes wrote in the MIT Technology Review in 2016, putting together the iPhone in the US from parts made abroad would only cost about $30 to $40 more per phone, a modest increase for a device with a 64 percent profit margin. Even if every part was made in the US, an iPhone would cost about $100 more, Kakaes concluded, assuming raw materials were still purchased on global markets....

But the cost of assembly is not the big issue.

#4 | Posted by LampLighter at 2018-09-13 03:12 PM | Reply

Damn, $30 on a $1000 phone............... you are killing me.

#5 | Posted by Sniper at 2018-09-13 04:11 PM | Reply | Funny: 1


@#5 ... Damn, $30 on a $1000 phone. ...

That #30 on a $1000 phone is even more insignificant when you consider the profit margin that Apple has on the iPhone.

But, again, the cost is not the main issue.

I suspect you know that, as you keep trying to deflect away from the main issue and towards the cost.

#6 | Posted by LampLighter at 2018-09-13 04:15 PM | Reply

you are killing me.

#5 | Posted by Sniper

You tease.

#7 | Posted by donnerboy at 2018-09-13 04:32 PM | Reply | Funny: 1

I suspect they'd add "Made in the USA" to the brand and raise their prices higher. The Apple cult following would gladly pay the extra premium.

#8 | Posted by Pirate at 2018-09-13 05:08 PM | Reply

According to Corky, these are all robot jobs anyways.

The new economy is based around typing on the internet and flagging Zed NW.

#9 | Posted by SheepleSchism at 2018-09-14 11:56 PM | Reply | Funny: 1 | Newsworthy 1

how much are the Philippine help account phone techs getting paid by Comcast, Paypal, ... ?

why does my Epiphone ES335 Pro made in China, set up in Nashville by Gibson (Gibson owns Epiphone), cost $375. and the Gibson USA one cost from minimum 4x... closer to 6-10x. a bit better wood and wire ain't THAT much. ... why?

#10 | Posted by ichiro at 2018-09-15 04:02 AM | Reply

...and it sure as H Ain't skill.

#11 | Posted by ichiro at 2018-09-15 04:06 AM | Reply

#8 no, we like our ---- made in the far east. namaste

#12 | Posted by ichiro at 2018-09-15 04:10 AM | Reply

Guy makes iPhone from scratch with junk picked up from Chinese vendors.

And it works.

www.youtube.com

#13 | Posted by J_Tremain at 2018-09-16 02:03 AM | Reply

Watch this too....

Adding a headphone jack to an iPhone.

www.youtube.com

Only in China.

#14 | Posted by J_Tremain at 2018-09-16 02:04 AM | Reply

Comments are closed for this entry.

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