Apple plans to spend $30 billion in the U.S. on facilities, but not a word about manufacturing.
Apple put out the kind of press release companies dream of this week.
It plans to spend $30 billion in the U.S. on new data centers and other facilities, create 20,000 new jobs, build a new corporate campus and spend money on educating the next generation as well.
What’s not to like, right? The naysayers would point to a few things, including the location where it makes the products that account for most of its profits — iPhones.
The best-selling consumer device in the United States is designed in Cupertino, Calif. and manufactured primarily 6,500 miles away in Shenzhen, China at the Foxconn facilities. It has no plans to change that.
Instead, Apple’s new campus will initially bring on extra tech support folks. That’s all well and good, but isn’t it time to bring production back here as well? A good part of Donald Trump’s successful White House campaign in 2016 was based on promises to bring back manufacturing jobs to America. Love him or hate him, many would agree that we’d rather have products made here than elsewhere. So if we can still make cars and appliances here, why not a smartphone?
Because the phone would cost as much as double, in the $2,000 range for the iPhone X, says tech analyst Tim Bajarin of Creative Strategies. And he cites other reasons as well, notably the cost of skilled labor in China (who are paid around $100 a week, he notes, way less than we offer,) the availability of parts in Asia and the lack of suitable manufacturing facilities here, which would cost Apple millions of dollars to build.
“It could be done, at a huge cost, not just to Apple, but to you and me as well,” says Bajarin. The bottom line: “We lost manufacturing to Asia, Southeast Asia, India and Mexico two to three decades ago, and it’s never coming back.”
Beyond Apple, Samsung creates many of its Galaxy phones in South Korea and manufactures them there, as well as Vietnam and India, while Amazon churns out those Echo and Dot speakers in China, and Japan based Nintendo makes the popular Switch video game system in Asia as well.
I know all the reasons for why Apple would choose not to make an iPhone here, but that doesn’t stop me from saying, try it. If Apple wanted to shift some production here, open an Apple University to train workers to be as nimble and learned as the Chinese, it could. After all, we’re talking about the world’s most profitable, and some would argue, innovative company.
The company could offer a special, more expensive, “Made in the U.S.A.” edition of the iPhone (in red, white and blue colors, perhaps) and I’m betting people would buy it. Maybe not with the kinds of numbers seen with the cheaper version, but isn’t it worth giving it a try, and perhaps, ahem, thinking differently?
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