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Donald Trump Effect? Apple Likely To Start Making iPhones In The U.S.

By Rahul Srinivas
Published on: 12:27 PST, Nov 17, 2016

If you happen to own an iPhone, do this little thing. Flip your phone over and take a look at the fine text you’d see at the bottom of the back panel. That is where you would find the following text embossed for everyone to read: “Designed by Apple in California. Assembled in China.” That’s right. All the iPhones that you used ever since the phone was first announced nearly a decade ago have been made in China.

This is no secret. When Apple set out to make the iPhone, going the China way made complete sense. Back then, Apple wasn’t the giant that it has become today and for them, outsourcing the manufacturing of their new iPhone to already established factories in China was the more logical (read: affordable) option. The advantages were too many. Apple didn’t have to invest in building new factories in the U.S. More importantly, labor was way cheaper in China than at home. The overall cost savings were significant. Companies like Foxconn and Pegatron were awarded contracts to make the iPhone for Apple and these companies have been doing it pretty well for the past 10 years.

So, what is changing?

Well there is a bit of a rumor going on about the possibility of Apple considering the prospect of manufacturing iPhones in The U.S. The source of this news is Japanese publication Nikkei Asian Review. In a report, the publication claims that a source has indicated to them about Apple “studying the possibility” of moving its iPhone assembly line to the U.S. The interesting bit about the development is the fact that Apple would continue to let Hon Hai Precision Industry — the parent company of Foxconn to make the phones for them. Pegatron (the other company that makes iPhones and iPads for Apple) was also asked to do the same — only this time, the factories would be somewhere in the continental United States instead of faraway China. The source went on to add that while Foxconn has agreed to the plan, Pegatron, concerned over cost factors, declined to move ahead with it.

“Apple asked both Foxconn and Pegatron, the two iPhone assemblers, in June to look into making iPhones in the U.S. Foxconn complied, while Pegatron declined to formulate such a plan due to cost concerns.”

While the reason for Apple’s decision to move production of the iPhone to the U.S. is not fully understood at this time, what is to be noted is the timing of this (rumored) decision. It was not too long ago when President-elect Donald Trump had stated that he would like to see Apple move its iPhone production line to the U.S. This, according to Trump, would boost the local economy and also ensure U.S. citizens get more employment opportunities. In the speech, Trump had also called for a boycott of Apple products after the company declined to provide the FBI with a method for unlocking an iPhone used by San Bernardino terrorist Syed Farook.

So, is this being done to please the new president-elect?

Now, how difficult is it for Apple to practically move its assembly line to the U.S.? For a company the size of Apple, it shouldn’t be a herculean task. Note that the factories in China are mere assembling points for the iPhone. This is because components for the iPhones come to these factories from countries across the world. Almost 100 percent of research and development and product design are all still managed from the U.S. So, the only reason the new iPhones are made in China is the overall lower cost to make them there. This also means Apple gets a larger profit with each iPhone sold.

When asked about these developments, Apple, in typical fashion, declined to comment. Foxconn and Megatron also declined to respond to emails and calls asking for comments, the newspaper added.

[Features Image By Pixabay]

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