Billionaires do not care because they are stateless. If the US collapses they will just live in Switzerland etc.
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Apple, Other US Tech Firms Sign Letter Protesting India's PC Import Restrictions
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Yes, and they are generally gaming machines or servers, all of which can command a high enough price to make it worthwhile, especially if customers add in high margin options. I suspect the are laso relatively low volume so you don't need a huge facility with peaks and valleys in demand and have customers who don't expect to order today and get tomorrow. As an example, I configured a low end Falcon, with the cheapset parts I saw and it came in at around $3111 with a 12 day build time. A different model than mass producing PCs for a large customer base.
Some ar emore than just a business relationship and have links forged over a few hundred years. even so, friends have disagreements and fights but the friendship endures long run.
However, business rleationships can be important - witness China's weaking economy and their purported request for the US to increase trade with them to help them out. As a business relationship, that's when you get concessions, including geopolitical ones.
When the tech sector, particularly the American tech sector doesn't like something a government is doing that government is probably doing the right thing.
I think Apple is approaching differently. Like China there are over a billion people living there. Having manufacturing there insulates them from outside effects. They can sell what they build there if needed.
Not even Canada?
Everybody loves Canada… until Olympics hockey starts then all bets are off.
We love you, little brother who gets better grades than us! *pats head*
We're obviously using estimates here but I just don't see how making iPhones in the U.S. or Europe would increase the price 1.5 to 2 times given how the increased labor costs would be spread over the huge number of iPhones Apple makes each year.
To be frank this isn't a racism issue. India has more internal racism against themselves than any nation I experienced. Their wealthy classes don't even consider themselves the 'same race' as 70% of the population. It's an apartheid state.
If you visit r/linkedinlunatics you see some of the terrible and toxic behavior of this wealthy class. There's a kind of social malady that has infected them in the last decade. Maybe they became arrogant because they managed to get a CEO at Microsoft and Google. Now that arrogance has combined with toxic behavior, lying and corruption. It's very visible on the web.
Intelligent hard working Indians have been trying to call out this toxic behavior but they get threatened or their voices disappear in an ocean of bot messages.
That of course brings us directly to the other visible issue. Bots, scams and spam out of India. It is very sad that many poor people are being pressured into doing this because they feel hopeless. Social media CEOs are doing nothing about it because they indirectly profit from the scams especially if crypto is involved.
If companies like Apple or Dell etc have to pay device taxes none of that money will go to helping the poor. It will simply be stolen and shuffled into some bank in Dubai or offshore.
As I have said before, my 1.5 to 2x may have been high, although depending on the % of labor and pay rate, 1.5 might not be out of the picture once you factor in higher wages, non-wage labor costs and a 40% margin; but even with low estimates it's a 10-30% or so price hike, which is still significant. We are also assuming a manufacturer can get enough skilled labor to work at assembly, as well as seasonal to cover the launches. The lack of a labor pool might even be a bigger impediment and thus until manufacturing is almost fully automated you're unlikely to see a return to the US, EU or the like.
Again, it’s not just the labor cost. Few to none of the components are manufactured in the US either, so those are now taking worldwide tours on cargo ships (whose rates have gone through the roof during covid, I believe like an actual 10x increase was seen, unsure how much they have come down since..), whereas in China a good # of components are essentially coming from ‘next door.’
You also have higher facility costs, higher insurance and regulatory compliance costs, etc.
I don’t think the 1.5x cost is remotely out of line unless profit margins were reduced. Maybe someone with more up to date numbers or working in large supply chains can weigh in.
It may not be just about labor costs but I still think "1.5 to 2 times" the price to have iPhones assembled in the U.S. or Europe is out of line given just how many iPhones Apple makes every year and how costs would be spread over all of those units every year.
And yet, these companies are not the ones that signed the letter. Besides, these are just screw-driver assembly companies that "build" computers from the components they get from China and Taiwan.
If India wants free flow of labor for its software developers, they must allow free flow of products. I wish US govt puts same restrictions on Indian software companies to hire certain % of people in USA.
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That’s only the fixed costs, not variable ones. As others point out, if fixed costs such as facilities goes up, price goes up and sales may go down; which means the fixed costs are spread over fewer units, increasing costs even more.
But… an Apple iPhone if manufactured from within Indian factories, does it count as an import?
Not if for local sale.
We can see the same thing happening in the US, e.g. Toyota and others with manufacturing plants in Arkansas or SC, etc. It can get complicated, but the parts themselves may be subject to import taxes if coming from <outside the country being discussed> as well.
If everything for manufacture and assembly is all done within a single country (for much of China’s retail manufacturing this is closer to true than not nowadays), there are no taxes until exporting for sale to <somewhere else> other than whatever sales and revenue taxes apply.
There are some exceptions in various industries and for US designated ‘Foreign trade zones,’ e.g. in some cases car manufacturers in the US don’t have to pay the component taxes for parts and materials to build the vehicle, but then do pay the (lower) tax on the finished vehicle now being ‘imported’ into the US for sale.
It’s messy and complicated, but even just on basic costs, the shorter the supply line for all components going into manufacturing and assembly, the better, unless the cost of parts/materials AND shipping AND import taxes are still significantly lower - and shipping times are able to be made to work in a given case.
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Great, the $7,000 Mac Pro is manufactured in the US. Buy it.
The reason only the Mac Pro is Made in US is because that's the only product that has the cost buffer to accommodate manufacturing in US. So if you don't want a Mac Pro, are you willing to pay twice of what you would pay now for it?
Yes but, again, I still think "1.5 to 2 times" the price to have iPhones assembled in the U.S. or Europe is out of line given just how many iPhones Apple makes every year, how costs would be spread over all of those units every year, how other costs could be spread out over time, etc.
You seem fixated on the 1.5 to 2x, a number I said may be on the high end.
Even so, the issue is not fixed, but variable costs; which don't change per unit based on units shipped.
Fixed costs may go up due to difference in the commercial environment and be spread out over all units.
Variable costs,, such as labor, shipping costs, wip all would contribute to a price increase. Add the required margin and any price increase could be non-trivial. All it would take is a 35% increase in the cost to make an iPhone to result in a 50% increase in price a at 40% margin. While 35% is unlikely, even a 10% increase results in a 14% increase in price.
All that assumes a company can get the amount and skill levels of labor they need, some of which who will work seasonal jobs, at the place they need them when the need them. That may be a bigger challenge than costs.