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How much would an American made iPhone cost?

coneman5259

coneman5259

macrumors member
Original poster
Sep 20, 2007
81
0
Chicago
With all the people complaining about shipping jobs overseas, I was just wondering how much it would cost to make an iPhone in America. So if anybody has an idea of parts cost and current labor involved and cost of labor in America we would be very interesting to see how much of a deal we are getting by having them produced overseas.
 
I have thought about this a number of times in the last few years, as tech companies have been relying more and more on exploitation of labor in east Asia. I'd certain be willing to pay say $15-20 more for devices made domestically.
 
Depends... without having the time to research, I'd guess at least some of the following would be factors in the cost difference:
  • Hourly employee rates
  • Employee benefits
  • Component shipping costs
  • Finished product shipping costs
  • Training for skilled labor
  • Building factories to assemble product
 
There are FAR too many factors to come up with a real answer, but as I understand it the workers there take home somewhere between $1,500 - $3,000 per year. A worker in the U.S. would probably be making more like $40,000 for that kind of work.

So how much would that raise the cost of the phone? I can't say since that's only 1 small part of the puzzle, but I'm betting it would be enough for you to notice, that's for sure.
 
No one would get paid 40k / year to put together iphones in america. The apple repair shop here pays their apple certified techs $10-14/hr d.o.e. I'd think it would be comparable to that if not less.
 
Disc Golfer said:
No one would get paid 40k / year to put together iphones in america. The apple repair shop here pays their apple certified techs $10-14/hr d.o.e. I'd think it would be comparable to that if not less.
Click to expand...

Hard to say. $40,000 is less than what auto factory workers make. Yeah yeah, I know everyone say they're overpaid...but I thought that 25% less than their number was a good guess. But I can't say for sure, of course.

At any rate, I would point out that even at $10 per hour they'd be making 10x what Foxconn employees do. So even your lowest guess would raise the cost of the phone significantly.
 
There's other factors as well that haven't been mentioned beyond factory employee salaries.

Utilities cost, taxes, capital (cost of buildings and equipment), etc.

I wouldn't surprise me in the least that the price could possibly double if made here in America.

There's a reason many companies outsource manufacturing. It's far cheaper. Especially for electronic consumer goods.
 
mrtune said:
There's other factors as well that haven't been mentioned beyond factory employee salaries.

Utilities cost, taxes, capital (cost of buildings and equipment), etc.

I wouldn't surprise me in the least that the price could possibly double if made here in America.
Click to expand...

We have a winner. The cost of regulations (energy, legal, environmental, ect) alone in the US would make it cost ineffective to try and make something like an iPhone here. Add in the cost of labor and none of us could afford anything made by Apple.

The cost of doing business in the US has gotten out of hand, and that's a damn shame.
 
Not just cell phones. Almost all consumer electronics like TV's, computers, radios etc. would be out of reach for Americans. Even cars would be out of reach if it weren't for bailouts..... but that's another story. :eek:
 
If something is made in another country rather than the companies country of origin, you can guarantee that it will be made for a lot less, if it came close, the company would make it in their country and push their patriotic stance. It is the same the world over, in the UK a lot of the call centres are in Asia.
 
Riemann Zeta said:
I have thought about this a number of times in the last few years, as tech companies have been relying more and more on exploitation of labor in east Asia. I'd certain be willing to pay say $15-20 more for devices made domestically.
Click to expand...

Hahahahaha! Yeah, I'd easily pay $15-$20 more for a domestically manufactured iPhone....I'll be seeing Santa this Christmas before that happens. It would cost far more than that to make it in the US.
 
Disc Golfer said:
No one would get paid 40k / year to put together iphones in america. The apple repair shop here pays their apple certified techs $10-14/hr d.o.e. I'd think it would be comparable to that if not less.
Click to expand...

Keep in mind that $14 an hour is almost 30k, so really you are not that far off.
 
Stein357 said:
I would say the cost of building the factories is more of a concern that paying people to build the phones
Click to expand...

Not really, factories can be built cheap, even in the US. And it's a one-time fixed cost. It's the ongoing costs such as power, labor, taxes, etc.. that are the real roadblock.
 
I'd happily pay double the price for a US made iPhone because I'm getting tired of build quality issues with cr@ppy China made products.
 
Rooskibar03 said:
The cost of doing business in the US has gotten out of hand, and that's a damn shame.
Click to expand...


Different industry, but Mercedes, BMW, Toyota, Honda, and a few others run very successful auto manufacturing plants here in the USA.
The VW Group's newest plant will be opening soon in Chattanooga, TN.

It can be done.
 
Being a financial analyst for an outsourcing company, I'm particularly well suited to answer this question. That being said, I have no hard numbers to go on. After about 5 minutes of gathering some quick numbers from Google searches I came to this estimated guess... (I'll spare the sloppy details and assumptions) In order to have the iPhone manufactured in the United States, it would add somewhere around $120 per phone in the cost to build. To keep their profit margins and subsidies in tact, that would raise the price of the phone for end users by about $150. So think a price entry point of $350 instead of $200. Also, this is if they outsourced the work to American manufacturing plants. If they wanted to build the factories and employ the workers themselves, this cost would go through the roof.

Like I said, I don't have hard numbers so I basically guessed at everything I used as data (Google helped). However, I believe the $150 additional price number is a good estimate.
 
mullman said:
It can be done.
Click to expand...

Sure, it can be done. But it also should be done.

While it would cost more to Apple and the consumer, I think many would be willing to pay. I also think the federal and state governments would offer them HUGE incentives to build a factory here. Still, the price of USA made items would be substantially higher.

The question companies like Apple need to start asking themselves though, in this economy especially, is can they afford to keep sending these jobs overseas? The race to the bottom pricing will eventually pull us down with it.
 
mullman said:
Different industry, but Mercedes, BMW, Toyota, Honda, and a few others run very successful auto manufacturing plants here in the USA.
The VW Group's newest plant will be opening soon in Chattanooga, TN.

It can be done.
Click to expand...

Yeah, different industry. They have WAY more wiggle room with items that cost 10's of thousands or sometimes 100's of thousands of dollars. Also, freight costs are much different.

A handset that costs under $200 to manufacture in China has much less wiggle room to cover the increased cost of labor, power, regulations, etc...
 
maybe union costs? and dont forget the additional costs added to the retailer for loads of them that "fall off the truck" in mob hijackings, lol just like the grocery store adjust their prices to offset the shoplifters.
 
athand said:
Speaking about stupidity, only REALLY stupid people don't respect other's opinions no matter how much they disagree with them.
Click to expand...

Build quality comes from the orders up top. How fast will they be made? How long is each worker allowed to spend per unit? What materials will be used? How often is the product checked before it goes out?

None of these things are dependent on where the factory is. Orders are orders. Thus, the only difference I can see is that you're attributing poor quality to the Chinese people themselves. That they're somehow inherently inferior.

So forgive me for agreeing with other poster but yes, I say that's stupid and I can't respect it.
 
My grandpa was complaining about how the iPhone was made in China and all the "Buy America" crap that comes with the older generation, I reminded him that, while the iPhone is made in China, it's one of the only companies, and by far the most successful AMERICAN company to make a Cell Phone, at least they are keeping the engineering and design jobs here. For reference he has an LG phone, I think I won that one. :D
 
Small White Car said:
Build quality comes from the orders up top. How fast will they be made? How long is each worker allowed to spend per unit? What materials will be used? How often is the product checked before it goes out?

None of these things are dependent on where the factory is. Orders are orders. Thus, the only difference I can see is that you're attributing poor quality to the Chinese people themselves. That they're somehow inherently inferior.

So forgive me for agreeing with other poster but yes, I say that's stupid and I can't respect it.
Click to expand...

+1.
 
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