D<\/span>onald Trump says<\/a> that if he becomes president, he will \u201cget Apple to start making their computers and their iPhones on our land, not in China.\u201d Bernie \u00adSanders hasalso called<\/a> for Apple to manufacture some devices in the U.S. instead of China.<\/span><\/p>\n Neither candidate could instantly make that happen. As Steve Jobs once told President Obama<\/a> when he asked why Apple didn\u2019t make phones in its home country, the company didn\u2019t hire manufacturers in China only because labor is cheaper there. China also offered a skilled workforce and flexible factories and parts suppliers that can, Apple believes, retool more quickly than their American counterparts.<\/span><\/p>\n An artist\u2019s rendering of an iPhone deconstruction that was performed by the analyst firm IHS.<\/p><\/div>\n But set that aside for now, and imagine that Apple persuaded one of its Chinese manufacturers to open factories in the United States or did that itself. Could it work? Apple could profitably produce iPhones in America, as some high-end Mac computers are produced, without making them much more expensive. There\u2019s a catch, though, that undermines Trump\u2019s and Sanders\u2019s arguments. This becomes clear if you carry our thought experiment to its most extreme conclusion.<\/span><\/p>\n Scenario 1<\/strong><\/p>\n Today Apple contractors assemble iPhones in seven factories\u2014six in China and one in Brazil. If the phones were assembled in the U.S. but Apple still sourced components globally, how much would that change the price of the device?<\/p>\n According to IHS, a market analyst, the components of an iPhone 6s<\/a> Plus, which sells for $749, cost about $230. An iPhone SE, Apple\u2019s newest model, sells for $399, and IHS estimates it contains $156 worth of components<\/a>.<\/p>\n Assembling those components into an iPhone costs about $4 in IHS\u2019s estimate and about $10 in the estimation of\u00a0 <\/span>Jason Dedrick, a professor at the School of Information Studies at Syracuse University. Dedrick thinks that doing such work in the U.S. would add $30 to $40 to the cost. That\u2019s partly because labor costs are higher in the U.S., but mostly it\u2019s because additional transportation and logistics expenses would arise from shipping parts, and not just the finished product, to the U.S. This means that assuming all other costs stayed the same, the final price of an iPhone 6s Plus might rise by about 5 percent.<\/span><\/p>\n What benefits would this bring to the U.S.? Apple says its suppliers employ more than 1.6 million workers<\/a>. But final assembly of the phones accounts for a small fraction of that. So even if Apple could convince Foxconn or another supplier to assemble iPhones in the U.S. without cutting into its profits too badly, that alone probably wouldn\u2019t be as transformative as Trump and Sanders imply.<\/span><\/p>\n Scenario 2<\/strong><\/p>\n What, though, if components were to be made in the U.S. as well?<\/span><\/p>\n![\"An](\"https:\/\/stateofthenation2012.com\/wp-content\/uploads\/2016\/06\/iphonex2000.jpg\")
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What I am saying from a historical perspective is that the time we live in TODAY is peak technology. We are living in an age at the pinnacle of technological invention. Savor it, my friends.The technological pipeline is closed.<\/span><\/p>\n Submitted by E.R ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~<\/p>\n
\nJune 11, 2016<\/p>\n