We think of the iPhone as American, but it’s made all over the world. How much more would the iPhone cost us if it really was American?
The Massachusetts Institute of Technology has published a new report detailing how much the iPhone would cost if Apple moved production entirely to the US. The report is in response to calls from Donald Trump for Apple to stop building its devices in China.
In scenario #1, Apple moves manufacturing from China to the US. Right now, MIT says it costs between $4 and $10 (£3-7) to assemble the components of a single iPhone. According to the research, making this move would add between $30 and $40 (£20-28) to the entire cost, and could result in a 5% cost increase for consumers buying the iPhone 6S Plus.
“That’s partly because labour costs are higher in the US, but mostly it’s because additional transportation and logistics expenses would arise from shipping parts, and not just the finished product, to the US,” explains the MIT article.
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So that leaves us with scenario #2: what happens if Apple made all of its components in the US too? Apple currently sources its materials from all over the world, and is fairly transparent about this. The company has 766 key suppliers across all of its devices, 346 of which are based in China. There are a further 126 in Japan, 69 in the US, and 41 in Taiwan.
According to the MIT report, producing all of the components in the US would lead to significant cost increases:
“In this scenario, a phone would be at most $100 (£70) more expensive, assuming that the raw materials that go into the components were bought on global markets,” says the report.
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Right, so now we’re onto scenario #3: what if Apple only built an iPhone with “American atoms”, i.e. only using materials found in the US? By doing this, Apple would no longer be reliant on foreign governments for access to raw materials. Naturally, this makes the process significantly trickier.
The MIT report says that an iPhone has roughly 75 elements in it, so that’s about two-thirds of the entire periodic table. Unfortunately, some of the most important components, like aluminium made from bauxite, can’t be sourced in the US (there are no bauxite mines in the states). Many of the materials would need to come from other nations like China.
The article quotes author David Abraham as saying: “No tech product from mine to assembly can ever be made in one country”.
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Would you pay more for a US-made iPhone? Let us know in the comments.
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Editorial independence
Editorial independence means being able to give an unbiased verdict about a product or company, with the avoidance of conflicts of interest. To ensure this is possible, every member of the editorial staff follows a clear code of conduct.
Professional conduct
We also expect our journalists to follow clear ethical standards in their work. Our staff members must strive for honesty and accuracy in everything they do. We follow the IPSO Editors’ code of practice to underpin these standards.
