Let’s assume that Tim Cook the CEO of Apple is summoned in the White House to discuss Apple’s devices production in the US with the newly elected president Donald Trump and the conversation has ended like this.
Trump: Listen, Mr. Cook, it is a presidential order for Apple that from now all of Apple’s gadgets must be assembled in the USA, not in China.
Tim cook: What? Are you sure Mr. President?
Donald Trump: Yes, I am, because I want to make America great again with our rich economy.
Tim Cook: (After thinking for a while), Ok Mr. President, but the phone will be very expensive to afford anywhere else in the world.
Trump: No worries, I will make people buy the US-made iPhone as I make Mexicans pay for the big and long wall between America and Mexican border.
You may laugh about this conversation between the US President Trump and Cook but you know that Trump already requested the Apple CEO to come back home officially to produce Apple’s devices in the country instead of China.
Well, if it happens then let’s see, how much Apple needs to spend for the US-made iPhone production in the country.
The labor cost in China:
According to The New York Times, the iEconomy research firm has deciphered that whereas for the Apple iPhone assemble in China at the Foxconn factory, the company pays a highest $2.20 an hour to a daily labor which figures out nearly $400 in a month but without overtime and to get this amount of money a Chinese daily labor has to work at least 160 hours in a month means 12 hours in a day and 6 days in a week.
The raw material suppliers:
According to Popular Science, the tech news giant suggests that Apple gathers its raw material for its devices from a total of 748 suppliers which are more than three-fourths from Asian countries like 663- – or around 89%- – are in Asia including 44% of the aggregate in terrain China and only the 85—or 10% suppliers from North America, the company’s homeland.
On the other hand, the research firm IHS record implied that Apple spent $236 on manufacturing an 16 GB variant of iPhone 6s Plus smartphone without the phone’s marketing and R&D cost which was announced a year ago with the retailer market value of $749.
The Labor cost in the US:
Wikipedia addresses that On March 27, 2014, Connecticut passed legislation to raise the minimum wage from $8.70 to $10.10 by 2017, however, this is about next year but what about the present minimum wage for an hour? Yes, it is $7.25 per hour, according to the information. So, if we calculate with the Chinese labor’s per week’s working hour which is 160 hours then it figures out as (160 x $7.25=$1,160) which means an American labor will receive, at the end of the month, around $4,640 while the Chinese labor gets only $400.
This is just the labor cost, what about the raw material’s shipping cost which Apple has to bring in the US from numerous countries like China, Japan, South Korea, Finland, and much more? Yes, it is true that as Apple’s devices are manufactured now in China, therefore, Apple is in the safe zone on shipping cost because these countries are not far from each other’s compared with the US.
However, if Apple needs to ship all the raw materials to its homeland in the US apart from the 10% US supplier then the question to the honorable new President Donald Trump is, will the shipping cost be cheaper for Apple than it is now paying in China?
At the end, President Trump must know that if Apple sets up a factory in the US to produce Apple devices then the company has to spend everything in the US Dollar, not by the Chinese Yen, and I believe that as a successful businessman Donald Trump must know how important that currency is in the business.
The post Before producing iPhones in the US, President Trump should consider these facts appeared first on TheTechNews.