What would it cost Apple to make iPhones in the U.S.?(technologyreview.com)
technologyreview.com
What would it cost Apple to make iPhones in the U.S.?
https://www.technologyreview.com/s/601491/the-all-american-iphone/
5 comments
Because you want to be the one holding the factories when the end game hits.
This seems to be the thing that everyone is missing in this conversation.
I agree with you but I've been wondering for a while if it's not a bad idea for the west to pass the tedious stuff off to China to use their labour to build our own automated factory.
It seems risky though.
I agree with you but I've been wondering for a while if it's not a bad idea for the west to pass the tedious stuff off to China to use their labour to build our own automated factory.
It seems risky though.
> I don't know why we want so hard to bring these jobs back (the same way we always try to keep the metallurgic industry in Europe).
Because countries that cannot source their own weaponry become the pawns of those who can.
Because countries that cannot source their own weaponry become the pawns of those who can.
To keep the design expertise in-house. Or as aptly put in this piece:
> He had subsequently watched its commercial aircraft business outsource itself to death. A key problem was that designers became so out of touch that they no longer understood basic manufacturing realities.
http://www.fingleton.net/boeing-goes-to-pieces/
> He had subsequently watched its commercial aircraft business outsource itself to death. A key problem was that designers became so out of touch that they no longer understood basic manufacturing realities.
http://www.fingleton.net/boeing-goes-to-pieces/
"Donald Trump says that if he becomes president, he will “get Apple to start making their computers and their iPhones on our land, not in China.”"
Perhaps Trump's next construction should be 100% American as well, as opposed to his previous ones:
http://www.thedailybeast.com/articles/2015/07/08/trump-tower...
Perhaps Trump's next construction should be 100% American as well, as opposed to his previous ones:
http://www.thedailybeast.com/articles/2015/07/08/trump-tower...
You got me. I admit, I clicked wondering what aspect of the construction was done off-shore. Then I realized it wasn't.
Yup. Not done off-shore. Just using illegal immigrants. That shouldn't surprise anyone. As a businessman he would make money and cut corners any way he could and he has been proud of that throughout his campaign. I'm sure he will change and be more presidential after elected.
> As a businessman he would make money and cut corners any way he could and he has been proud of that throughout his campaign.
That's his qualification to be sure. However, he's running on a platform where he wouldn't afford others the opportunity to do the same.
> I'm sure he will change and be more presidential after elected.
They always do.
That's his qualification to be sure. However, he's running on a platform where he wouldn't afford others the opportunity to do the same.
> I'm sure he will change and be more presidential after elected.
They always do.
The article linked in submission isn't purely about off-shoring; it compares different level of an AmeriPhone: assembled here, parts from here, and source materials from here, detailing cost and practicality along the way.
I seriously doubt that "assembled in America by illegal immigrants" would be in the spirit of Trump's request of Apple, even though that's how he attained the wealth to put himself in the position to make that request.
I seriously doubt that "assembled in America by illegal immigrants" would be in the spirit of Trump's request of Apple, even though that's how he attained the wealth to put himself in the position to make that request.
I thought that Trump's idea (Scenario 4?) was to raise the import/tariff fee so that it would essentially cost the same regardless of where it was manufactured. Another option would be to eliminate things like NAFTA. I'm not saying these are good ideas (in fact they may be terrible), I just want to point out additional scenarios.
A better approach would be to make it attractive to operate in the US.
I don't support Trump's plans regarding tariffs / trade, however he is also supporting slashing the extremely non-competitive US corporate tax rate. Doing that - bringing it down to levels comparable to European rivals - would instantly make the US a lot more attractive to operate in.
And unfortunately while Bill Clinton strongly supports slashing the corporate tax rate, Hillary is just as strongly opposed to doing so.
And unfortunately while Bill Clinton strongly supports slashing the corporate tax rate, Hillary is just as strongly opposed to doing so.
An economic policy based on punishing businesses is not going to work well in the long term.
> extremely non-competitive US corporate tax rate
I'm hearing actual tax rate in real life is not that high, because of all loopholes used by the corporations.
I'm hearing actual tax rate in real life is not that high, because of all loopholes used by the corporations.
The actual rate is lower because corporations keep so much capital off shore because the nominal rate is so high.
According to King at the Ames Lab,
an iPhone has about 75 elements in it,
two-thirds of the periodic table.
The thing that lands in the box. Not the catalysts, and substances required for processes used during manufacture.
If I'm not holding it in my hands, right now, it doesn't make the list.
01. H (1) Hydrogen
02. He (2) Helium
03. Li (3) Lithium
04. B (5) Boron
05. C (6) Carbon
06. N (7) Nitrogen
07. O (8) Oxygen
08. F (9) Flourine
09. Na (11) Sodium
10. Mg (12) Magnesium
11. Al (13) Aluminum
12. Si (14) Silicon
13. P (15) Phosphorus
14. S (16) Sulfur
15. Cl (17) Chlorine
16. Ca (20) Calcium
17. Sc (21) Scandium
18. Ti (22) Titanium
19. V (23) Vanadium
20. Cr (24) Chromium
21. Mn (25) Manganese
22. Fe (26) Iron
23. Co (27) Cobalt
24. Ni (28) Nickel
25. Cu (29) Copper
26. Zn (30) Zinc
27. Ga (31) Gallium
28. Ge (32) Germanium
29. As (33) Arsenic
30. Se (34) Selenium
31. Br (35) Bromine
32. Sr (38) Strontium
33. Y (39) Yttrium
34. Zr (40) Zirconium
35. Nb (41) Niobium
36. Mo (42) Molybdenum
37. Ru (44) Ruthenium
38. Rh (45) Rhodium
39. Pd (46) Palladium
40. Ag (47) Silver
41. Cd (48) Cadmium
42. In (49) Indium
43. Sn (50) Tin
44. Sb (51) Antimony
45. Te (52) Tellurium
46. Ba (56) Barium
47. La (57) Lanthanum
48. Hf (72) Hafnium
49. Ta (73) Tantalum
50. W (74) Tungsten
51. Re (75) Rhenium
52. Os (76) Osmium
53. Ir (77) Iridium
54. Pt (78) Platinum
55. Au (79) Gold
56. Hg (80) Mercury
57. Tl (81) Thallium
58. Bi (83) Bismuth
59. Po (84) Polonium
60. Rn (86) Radon
61. Ce (58) Cerium
62. Pr (59) Praseodymium
63. Nd (60) Neodymium
64. Sm (61) Promethium
65. Eu (63) Europium
66. Gd (64) Gadolinium
67. Tb (65) Terbium
68. Dy (66) Dysprosium
69. Ho (67) Holmium
70. Er (68) Erbium
71. Tm (69) Thulium
72. Yb (70) Ytterbium
73. Lu (71) Lutetium
I think the takeaway from his statements are that it is virtually impossible to source the necessary raw materials that go into producing modern electronics from any one country.
Some of the points are bogus, like the rare earths thing; they used to be mined in the USA just fine. But China was cheaper, especially since they didn't price in the negative externalities.
> If I'm not holding it in my hands, right now, it doesn't make the list.
I don't see why things that are used during manufacture but do not end up in your hand should be excluded. The question being asked in that section of the article is whether or not the product could be produced entirely with materials and labor from the US, and so everything involved in making it should count.
I don't see why things that are used during manufacture but do not end up in your hand should be excluded. The question being asked in that section of the article is whether or not the product could be produced entirely with materials and labor from the US, and so everything involved in making it should count.
The tone of the article suggests that an iPhone is made of these elements, moreso than it does that they are made with these elements.
has about 75 elements in it
Given the context, though, parent's comment is reasonable. The isolationist drive that would bring iphone manufacturing and all the associated mining back to the US would go hand-in-hand with a very isolationist economy, in which we'd presumably not be able to get anything from other countries.
The thought exercise of in-sourcing everything that ever contributed to anything that eventually goes into a phone helps to point out how the idea of disentangling ourselves from the global market is absurd.
The thought exercise of in-sourcing everything that ever contributed to anything that eventually goes into a phone helps to point out how the idea of disentangling ourselves from the global market is absurd.
It isn't just the cost that's an issue, it's the fact that American workers are not as... flexible... on what constitutes an acceptable work/life balance. Would you do what these workers ( http://www.nytimes.com/2012/01/22/business/apple-america-and... ) do if you had any other opportunity at all? Labor laws aside, could they pay you enough to live and work like this and still make an affordable device?
Relevant quote from article:
Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.
A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.
“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”
Relevant quote from article:
Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.
A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.
“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”
Why is it legal to sell goods that are made with labor that would be illegal in the country of sale?
If the US and Europe required that as part of the certification process for sale the labor also had to be certified, it would make their economies more competitive while simultaneously raising quality of life abroad. It seems like an obvious win, even for a corporate congress, so i don't understand why it hasn't happened.
If the US and Europe required that as part of the certification process for sale the labor also had to be certified, it would make their economies more competitive while simultaneously raising quality of life abroad. It seems like an obvious win, even for a corporate congress, so i don't understand why it hasn't happened.
Because the actual point of most trade agreements nowadays is precisely to empower the investor class to override local standards regarding things like product composition (think of Europe and its cheeses), labor (what you said already), and environmental issues (think of how China and India dump garbage). It's not at all smart in the long-term if your goal is anything aside from class-struggle from the top, but that does in fact seem to be the goal.
Protectionist trade policy easily leads to wars. Banning goods produced with Chinese labor practices is tantamount to banning Chinese imports, which will have far reaching global implications beyond iPhones, and will increase military tensions greatly. Countries that don't trade find it much easier to start shooting at each other.
On the other hand, free trade leads to freer exchange of information, ideas, and aligns the incentives between nations so that cooperation is more beneficial. Powerful economic interests on both sides will have strong incentives to pursue peace. If those incentives are removed, nationalistic forces and firebrands have less of a counterweight to pursue miltaristic or aggressive policies.
As an example, think about the trade embargo against Iran. It was basically a declaration of war on Iran from the whole world. If the US institutes anything comparable with China it will be easily considered by China as an open act of hostility. This is how the Cold War 2.0 gets started.
On the other hand, free trade leads to freer exchange of information, ideas, and aligns the incentives between nations so that cooperation is more beneficial. Powerful economic interests on both sides will have strong incentives to pursue peace. If those incentives are removed, nationalistic forces and firebrands have less of a counterweight to pursue miltaristic or aggressive policies.
As an example, think about the trade embargo against Iran. It was basically a declaration of war on Iran from the whole world. If the US institutes anything comparable with China it will be easily considered by China as an open act of hostility. This is how the Cold War 2.0 gets started.
You had me until your last para. The sanctions against Iran were most certainly not akin to a declaration of war. If Iran had viewed it as such, it would have likely closed the Strait of Hormuz in retaliation, which it regularly vows to do if a warring scenario were to arise. So not even Iran viewed the sanctions as war-like.
The sanctions were are digression from international norms meant to coerce an equally disruptive violation of international laws - the covert production of highly enriched uranium and the illegal development of nuclear weapons.
The implementation of trade restrictions on Chinese goods would probably start a trade war, and another Cold War seems to me to be a plausible outcome. I agree with your conclusion on that point.
The sanctions were are digression from international norms meant to coerce an equally disruptive violation of international laws - the covert production of highly enriched uranium and the illegal development of nuclear weapons.
The implementation of trade restrictions on Chinese goods would probably start a trade war, and another Cold War seems to me to be a plausible outcome. I agree with your conclusion on that point.
The relevant rules for trade wars are "national treatment" and "most favoured nation". You will see those terms quoted extensively in any legal trade dispute, notably before the WTO.
Labour laws per se do not violate mfn or nt, so long as the labour laws apply domestically as well as to imports (since trade wars are essentially about import tariffs).
The primary reason we do not apply labour law to the producers of imports is because labour is poorly organized, under funded, and lacks political will and/or forethought.
Labour laws per se do not violate mfn or nt, so long as the labour laws apply domestically as well as to imports (since trade wars are essentially about import tariffs).
The primary reason we do not apply labour law to the producers of imports is because labour is poorly organized, under funded, and lacks political will and/or forethought.
Who in the US can authoritatively certify Chinese labor?
And what about the majority of iPhones which are not for sale in the USA? Can they be made with "slaves" since their destination is not the USA?
And if not (because Apple is a USA company) what keeps Apple from leaving the USA to escape the "no-slave law"? If Apple can't leave the USA in order to hire "slaves" to build phones for the non-USA market, how can they compete against a foreign company which can use "slaves?"
And if said foreign company builds an iPhone competitor using "slaves" for a cheaper price than the USA-made phone, how do you combat the black market in the USA for these "slave phones?" You just invented a local law enforcement problem.
And what about the majority of iPhones which are not for sale in the USA? Can they be made with "slaves" since their destination is not the USA?
And if not (because Apple is a USA company) what keeps Apple from leaving the USA to escape the "no-slave law"? If Apple can't leave the USA in order to hire "slaves" to build phones for the non-USA market, how can they compete against a foreign company which can use "slaves?"
And if said foreign company builds an iPhone competitor using "slaves" for a cheaper price than the USA-made phone, how do you combat the black market in the USA for these "slave phones?" You just invented a local law enforcement problem.
In order of appearance:
Who in the US can authoritatively certify Chinese labor?
You certify it just like anything else that is hard to inspect: require companies to sign binding documents that certify their goods as in compliance with the law, and fine them when proof is found this is not the case. It doesn't get rid of violations, but it does cut them down a lot.
And what about the majority of iPhones which are not for sale in the USA?
Just because one country jumps off a bridge, everyone else should follow suit? I find this kind of reasoning neither here nor there.
what keeps Apple from leaving the USA to escape the "no-slave law"
Nothing except profit. Why walk away from the most profitable markets you have, even if due to new legislation the profits are a little less obscene than they used to be?
how can they compete against a foreign company which can use "slaves?"
Because foreign companies wouldn't be able to use slaves if they want to sell their goods in the US or EU.
how do you combat the black market in the USA for these "slave phones?
There's already an illegal cheap phone circuit, for stolen phones. Besides, it might be a good thing if crime rings start pushing phones on people instead of pushing drugs. It would also be amusing if people would steal phones to fence them for money to buy illegal phones.
You can keep finding nits to pick, but ... I see point nor reason to do so.
Who in the US can authoritatively certify Chinese labor?
You certify it just like anything else that is hard to inspect: require companies to sign binding documents that certify their goods as in compliance with the law, and fine them when proof is found this is not the case. It doesn't get rid of violations, but it does cut them down a lot.
And what about the majority of iPhones which are not for sale in the USA?
Just because one country jumps off a bridge, everyone else should follow suit? I find this kind of reasoning neither here nor there.
what keeps Apple from leaving the USA to escape the "no-slave law"
Nothing except profit. Why walk away from the most profitable markets you have, even if due to new legislation the profits are a little less obscene than they used to be?
how can they compete against a foreign company which can use "slaves?"
Because foreign companies wouldn't be able to use slaves if they want to sell their goods in the US or EU.
how do you combat the black market in the USA for these "slave phones?
There's already an illegal cheap phone circuit, for stolen phones. Besides, it might be a good thing if crime rings start pushing phones on people instead of pushing drugs. It would also be amusing if people would steal phones to fence them for money to buy illegal phones.
You can keep finding nits to pick, but ... I see point nor reason to do so.
> it's the fact that American workers are not as... flexible...
And to a certain extent, american workers can choose to quit and try to find work elsewhere. There is no "freedom of work" in China for people coming from rural areas. It's a bit like H1Bs in the US. They can't choose where they want to work. When you don't have freedom of work you're basically a slave to your employer and you don't really have the freedom to quit.
And to a certain extent, american workers can choose to quit and try to find work elsewhere. There is no "freedom of work" in China for people coming from rural areas. It's a bit like H1Bs in the US. They can't choose where they want to work. When you don't have freedom of work you're basically a slave to your employer and you don't really have the freedom to quit.
It is simply a cost issue. Look at North Dakota during the oil boom, for example. It turns out paying $150k+ gets you plenty of applicants willing to work 120 hour weeks out of a dormitory.
> “The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”
Extreme sugar coating with MBA lingos of forced labor camp.
I am GLAD there's no such American plant.
Extreme sugar coating with MBA lingos of forced labor camp.
I am GLAD there's no such American plant.
12 hour shifts sounds very 19th Century! Workers marched in the streets against such things... I thought PRC was founded on the communist ideals of the proletariat?
12 * 2 = 8 * 3.
Introduce an 8 hour day and you can hire 50% more workers!
12 * 2 = 8 * 3.
Introduce an 8 hour day and you can hire 50% more workers!
> I thought PRC was founded on the communist ideals of the proletariat?
China is a dictatorship which provides capitalists slave like workforce. The capitalists get their slaves and can hypocritically point fingers at China and how bad communism is, and the corrupt Chinese government gets his money. Everybody is happy (except the victims of that cynical farce). That's shows the power of PR and persuasion. I remember 15 years ago people still protesting against China at its terrible working conditions in the west, or against the treatment of Tibet by the Chinese government. Who questions that today ? nobody, not even lefties.
Of course Apple could build the iPhone in the west and sell it at the exact same price. It just wouldn't be as profitable as it is and would require significant investments on infrastructure and factories but the "market" wants high return on investment, not just profitability. Worker's rights arbitrage is how corporations like Apple, any textile manufacturer or hardware manufacturer got so rich.
Anybody who thinks that scheme made things cheaper needs to look at the insane debts most western countries are running. That's the hidden cost of all that system. That high debt is a sign the quality of life will go down in the west in the foreseeable future.
China is a dictatorship which provides capitalists slave like workforce. The capitalists get their slaves and can hypocritically point fingers at China and how bad communism is, and the corrupt Chinese government gets his money. Everybody is happy (except the victims of that cynical farce). That's shows the power of PR and persuasion. I remember 15 years ago people still protesting against China at its terrible working conditions in the west, or against the treatment of Tibet by the Chinese government. Who questions that today ? nobody, not even lefties.
Of course Apple could build the iPhone in the west and sell it at the exact same price. It just wouldn't be as profitable as it is and would require significant investments on infrastructure and factories but the "market" wants high return on investment, not just profitability. Worker's rights arbitrage is how corporations like Apple, any textile manufacturer or hardware manufacturer got so rich.
Anybody who thinks that scheme made things cheaper needs to look at the insane debts most western countries are running. That's the hidden cost of all that system. That high debt is a sign the quality of life will go down in the west in the foreseeable future.
Only if your unemployment rate is over 33%.
I am not glad there isn't such American plant yet. I foresee a day where plants are engineered to be flexible and cost efficient enough to mass produce at blink of an eye with a new design. We still have a very long way to go to exploit our own ingenuity, and this is only talking about automation.
Yet. Using cross training on the assembly line basically teach everyone all the positions on the assembly line can cut down on costs and improve quality. Use robots for the hard stuff, use people for the sensitive stuff that needs human hands.
I'm mostly concerned about waking up 8000 workers middle of the night, and making them work the following 12 hours, because of screw up by someone above them.
And the fact that the American Apple executive admires it with the terms of flexibility and such.
And the fact that the American Apple executive admires it with the terms of flexibility and such.
Welcome to the computer industry. When I worked as a programmer I had to be called into work to fix something management screwed up in and forced to work extra hours for.
But yeah I see your point that the workers live in a dormitory environment and not paid much and woken up at the last minute to switch from plastic to glass.
My criticism of Apple, one criticism is using slave labor in China to make their phones and other devices. But then almost everyone does the same thing with China. You can't treat human beings that way as it causes stress and mental problems. Many burn out and that is why they have suicide nets installed. http://www.dailymail.co.uk/news/article-2103798/Revealed-Ins... https://en.wikipedia.org/wiki/Foxconn_suicides
But yeah I see your point that the workers live in a dormitory environment and not paid much and woken up at the last minute to switch from plastic to glass.
My criticism of Apple, one criticism is using slave labor in China to make their phones and other devices. But then almost everyone does the same thing with China. You can't treat human beings that way as it causes stress and mental problems. Many burn out and that is why they have suicide nets installed. http://www.dailymail.co.uk/news/article-2103798/Revealed-Ins... https://en.wikipedia.org/wiki/Foxconn_suicides
> forced to work extra hours for.
You're not forced to work extra hours. You can quit and find a better employer. What you don't understand is that in China workers from rural area can hardly choose where they want to work. They are not living in a free society. Please to compare you're situation to theirs.
You're not forced to work extra hours. You can quit and find a better employer. What you don't understand is that in China workers from rural area can hardly choose where they want to work. They are not living in a free society. Please to compare you're situation to theirs.
Wait a few years :)
These jobs are becoming obsolete, and delocalizing to countries with lower labor costs is only a step before factories become fully automated (and some companies are reshoring because robots are becoming cheaper than outshore workers). The workers here that are left with no job and no marketable skills should be manifesting for an UMI instead of asking to politics & companies to keep the factories here.