APPLE COULD MAKE IPHONES IN US IN FUTURE

iphone

[11/17/16]   iPhones might one day soon carry “Made in America” labels.

Key Apple assembler Hon Hai Precision Industry, also known as Foxconn Technology Group, has been studying the possibility of moving iPhone production to the U.S., sources told the Nikkei Asian Review.

 “Apple asked both Foxconn and Pegatron, the two iPhone assemblers, in June to look into making iPhones in the U.S.,” a source said. “Foxconn complied, while Pegatron declined to formulate such a plan due to cost concerns.”

Foxconn, based in the gritty, industrial Tucheng district in suburban Taipei, and its smaller Taiwanese rival churn out more than 200 million iPhones annually from their massive Chinese campuses.

Another source said that while Foxconn had been working on the request from Apple Inc., its biggest customer that accounts for more than 50% of its sales, Chairman Terry Gou had been less enthusiastic due to an inevitable rise in production costs.

“Making iPhones in the U.S. means the cost will more than double,” the source said.

The person added that one view among the Apple supply chain in Taiwan is that U.S. President-elect Donald Trump may push the Cupertino, California-based tech titan to make a certain number of iPhone components at home.

According to research company IHS Markit, it costs about $225 for Apple to make an iPhone 7 with a 32GB memory, while the unsubsidized price for such a handset is $649.

Apple, Foxconn and Pegatron all declined to comment.

Not Made in America

Apple’s move appears to fall in line with Trump’s pledge to push American companies to make their products at home. There is a widespread perception among American voters that the U.S. is losing manufacturing jobs to other countries in this age of globalization and free trade.

Other than having its popular gadgets assembled in China, Apple also procures most of the key components for its flagship iPhones from Asian suppliers.

Taiwan Semiconductor Manufacturing Co. makes chips for iPhones, Japan’s Japan Display and Sharp supply panels for Apple’s handsets, and South Korea’s SK Hynix and Japan’s Toshiba produce memory chips for the device.

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