U.S. president-elect, Donald Trump spoke in January about a certain fruit-logoed electronics company: "We're going to get Apple to build their damn computers and things in this country, instead of in other countries."
Now, it looks like he may get his way.
Apple’s Chinese iPhone manufacturer, Foxconn Technology Group, is engaging in preliminary discussions about the possibility of bringing operations to the U.S., according to a statement released to the International Business Times:
"We can confirm that we are in preliminary discussions regarding a potential investment that would represent an expansion of our current US operations. While the scope of the potential investment has not been determined, we will announce the details of any plans following the completion of direct discussions between our leadership and the relevant US officials. Those plans would be made based on mutually-agreed terms."
In November, Nikkei Asian Review reported that this was at Apple’s behest – according to their source, “Apple asked both Foxconn and Pegatron, the two iPhone assemblers, in June to look into making iPhones in the U.S. Foxconn complied, while Pegatron declined to formulate such a plan due to cost concerns."
What exactly are the cost concerns with bringing iPhone manufacturing to the U.S.? To put it simply, even if Trump imposes his promised tariff of 45 percent on goods manufactured in China, it may still be more economical for companies like Apple to manufacture their products overseas. According to Apple CEO Tim Cook, this is in large part due to a deficit of skilled manufacturing workers in the U.S.
“…China put an enormous focus on manufacturing in what we would call vocational kind of skills,” Cook said in a 60 Minutes interview last year.
“The U.S., over time, began to stop having as many vocational kinds of skills. I mean, you can take every tool and die maker in the United States and probably put them in a room that we're currently sitting in. In China, you would have to have multiple football fields.”
Right now, the best estimate for the total cost to manufacture a 32 GB iPhone 7 is approximately $225, while the device retails for $649. According to Nikkei’s source, "Making iPhones in the U.S. means the cost will more than double.”
It’s hard to imagine Apple swallowing these losses itself, meaning if their phones move production to American soil, American consumers will be the ones paying the price.
For more news about Trump’s position on manufacturing, watch VIDEO: Trump Victorious? It’s the Manufacturing, Stupid!