Greg's bite: What if Apple assembled its products in the USA?
TweetFollow Us on Twitter

Greg's bite: What if Apple assembled its products in the USA?

By Greg Mills

On the day iPhone is likely to be announced for Verizon, a study I found looking at the profound effect on the US economy of Apple outsourcing assembly of iPhone to China is particularly interesting.  

Can you believe Apple CEO Steve Jobs could put Apple on track to hire as many as half a million Americans who are currently out of work, while only marginally decreasing Apple's stellar profits? Jobs could add over US$10 billion a year to the national payroll simply by bringing assembly of Apple products home. Our government should make such a move as easy as possible by making the US employer environment more conducive to such a move.

I did an article recently on Apple's industrial footprint in China. While the subject of that article was the nature of Apple's business dealings with contractor assembly companies and their employees in China, another issue came to light recently in a study done by the Asian Development Bank Institute, located in Japan.  See http://www.adbi.org/files/2010.12.14.wp257.iphone.widens.us.trade.defici... . On its face, Apple's decision to "import" fully assembled iPhone from China increases the US trade deficit with China by 1.9 billion dollars per year.  

That number isn't really as bad as it sounds, as the actual money paid by Apple for assembly in China was estimated to only be about $6.50 each. While that totals only $73.5 million, trade deficits are calculated upon the total assembled value of the product being exported. While $73.5 million dollars a year is enough for most of us to live on gracefully, it is not the 1% iPhone purportedly contributes to our trade imbalance with China, a figure commonly bandied about.

It is well known that iPhone -- and for that matter just about everything Apple makes and sells -- is assembled in China. The bottom line at the world's second largest company has swollen in part due to a business plan that keep prices down by sending assembly jobs overseas. The accounting for purposes of calculating our trade deficit with China is a bit deceptive. The truth is, with a profit margin of over 60% on an iPhone, Apple could hire Americans to assemble iPhone and still make a tremendous profit. Would that be hard to do? Yes, but the positive results for the United States would be profound and certainly survivable by Apple.

Based upon 2009 sales numbers of 11.4 million iPhones sold over seas, Apple could have added  $5.7 billion to US exports that year. With sales of iPhone soaring, these numbers are just a fraction of what is expected this year. With US assembly costs rising to an estimated $68 per US iPhone from the $6.50 per Chinese iPhone Apple would still make a 50% profit.  

If you figure, based upon global sales of 25,000,000 iPhones alone, sold in 2009, at $68 per iPhone, the US economy would have seen 1.7 billion dollars added to the national payroll that year. Rough numbers indicate that if Apple took a slight hit on its bottom line on the iPhone and only made a 50% profit instead of 60% by moving assembly of iPhone to the US they could have hired 68,000 Americans who were out of work.  Isn't 50% gross profit pretty darn good?

If you rerun the iPhone numbers based upon current estimates of up to 60,000,000 iPhones to be sold this year, at $68 per unit, Apple could add over four billion dollars to the American payroll and hire 163,000 assembly workers by simply assembling the iPhone in the USA.  

If you add the iPad to the situation, based upon similar numbers, if Apple makes 65,000,000 iPads in 2011 they could hire over 300,000 Americans by moving iPhone and iPad assembly alone to the USA and add up to 10 billion dollars to the US economy in salaries. Adding Macs to the numbers could add even more. I suspect the hit on the stock prices of Apple wouldn't be that hard, as the Wall Street buzz from making such a move would be overwhelmingly positive.   

If Apple moved assembly to the US, some people would be grateful and buy Apple instead of products from companies that assemble their products in China. Could increased sales and an improved US economy make this move by Apple a wash economically? I think so, but I am not an economist. Were Apple to do this, federal tax credits and concessions by states willing to make the Untied States and their state a more congenial host for employers would be required.  Congress should figure out a way to move US jobs back to the USA.     

Jobs should discuss Apple's terms for moving assembly of its product to the USA with President Obama. With unemployment and the economy putting him over the barrel, the Apple CEO could play his hand well to obtain concessions and tax advantages to move jobs from China back to the USA.  Imagine at the end of an Apple event if Jobs were to say: "Oh one last thing, we at Apple are grateful for the American dream that our success represents. We have decided that while it might hurt our bottom line a little bit, Apple is committing to begin the process of moving our product assembly lines back to the Untied States and making Apple a 'Made in the USA' company.  If you like that idea, could you please buy Apple stock and help us finance that?"  

That's Greg's bite for today.

(Greg Mills, is a Faux Artist in Kansas City. Formerly a new product R&D man for the paint sundry market, he holds 11 US patents. He's working on a solar energy startup, www.CottageIndustrySolar.com using a patent pending process of turning waste dual pane glass into thermal solar panels used to heat water. Greg writes for intellectual web sites and Mac related issues. See Greg's art web site at www.gregmills.info ; his email is gregmills@mac.com )

 

Community Search:
MacTech Search:

Software Updates via MacUpdate

Crypt of the NecroDancer Pocket Edition...
Crypt of the NecroDancer Pocket Edition 1.0 Device: iOS Universal Category: Games Price: $4.99, Version: 1.0 (iTunes) Description: Crypt of the NecroDancer is an award winning hardcore roguelike rhythm game. Move to the music and... | Read more »
Gear-grinding puzzle title Inner Circle...
If you saw our post earlier this month announcing the imminent release of ZPlay’s new creation, Inner Circle, you’ll be happy to know that it’s now available on the App Store. Established in 2010, developer and publisher ZPlay have taken the... | Read more »
CSR Racing 2: Your guide to what's...
CSR Racing 2, or CSR2, as it likes to call itself, has finally arrived. The follow-up to the immensely popular drag racing game CSR Racing is the first release from NaturalMotion since the studio's acquisition by Zynga in early 2014. [Read more] | Read more »
Nanuleu (Games)
Nanuleu 1.1 Device: iOS Universal Category: Games Price: $2.99, Version: 1.1 (iTunes) Description: Nanuleu is a strategy game where you take control of ancient magical trees that protect the land from an invading dark force. A... | Read more »
The Slaughter: Act One (Games)
The Slaughter: Act One 1.0.323 Device: iOS Universal Category: Games Price: $3.99, Version: 1.0.323 (iTunes) Description: “The game mixes realism and surrealism to create a story that can cause just as much laughter as fear. A-” -... | Read more »
NEO TURF MASTERS (Games)
NEO TURF MASTERS 1.0 Device: iOS Universal Category: Games Price: $2.99, Version: 1.0 (iTunes) Description: NEOGEO’s legendary golf game is back, in a brand-new mobile version with touch controls! NEO TURF MASTERS (also known as “BIG... | Read more »
How to send money to a friend with the F...
Facebook is already a lot of things to a lot of people. It's a social network, sure, but also a tool for catologing memories, chatting with friends, and much more. [Read more] | Read more »
Branch out into the Chinese market with...
Created a game that you’re super enthused about, only to find yourself struggling to get it the exposure that you believe it duly deserves? With the time, energy and money that goes into development, it’s only right that games should be given the... | Read more »
Pocket Arcade Story (Games)
Pocket Arcade Story 1.00 Device: iOS Universal Category: Games Price: $4.99, Version: 1.00 (iTunes) Description: Here comes a new challenger: it's the arcade simulation game you've been waiting for! Build your very own gaming... | Read more »
How to get coins faster in Rodeo Stamped...
There comes a time in a cowboy or cowgirl's life when all the riding and lassoing skills in the world aren't enough. You're going to need some cold, hard cash to keep your sky zoo expanding in Rodeo Stampede. [Read more] | Read more »

Price Scanner via MacPrices.net

New App Reminds Us to Put Down Our Phones and...
Mode, a new smartphone app that makes us more mindful of how we use our devices, debuts in the app stores today. The Mode app tracks time spent in different modes of day-to-day life without... Read more
ZuumSpeed Personalized Speedometer + HUD For...
RMKapps has announced the release and immediate availability of ZuumSpeed 1.0, its personalized speedometer plus heads up display for iOS devices. ZuumSpeed gives users over 18 custom fonts available... Read more
Apple refurbished clearance 15-inch Retina Ma...
Apple has Certified Refurbished 2014 15″ 2.2GHz Retina MacBook Pros available for $1609, $390 off original MSRP. Apple’s one-year warranty is included, and shipping is free. They have refurbished 15... Read more
9-inch 128GB Silver iPad Pro on sale for $50...
B&H Photo has the 9.7″ 128GB Silver Apple iPad Pro on sale for $699 including free shipping plus NY tax only. Their price is $50 off MSRP. Read more
Why Use Indie Opera And Vivaldi Instead Of Sa...
For many years my web browser workhorses were various permutations and spinoffs of the Netscape/Mozilla/Firefox Open Source platform, and the Norwegian indie browser Opera, which I took a shine to... Read more
Western Digital Launches Worlds Fastest 256GB...
At the Mobile World Congress in Shanghai Western Digital Corporation this week introduced a new suite of 256 gigabyte (GB) microSD cards, which includes the new 256GB SanDisk Extreme microSDXC UHS-I... Read more
KeyCue 8.1 Integrates With Typinator To Displ...
Ergonis Software has released KeyCue 8.1, a new version of the company’s keyboard shortcut cheat sheet. KeyCue 8 introduced a new way to define a wide variety of triggers, which can be used to... Read more
Save up to $600 with Apple refurbished Mac Pr...
Apple has Certified Refurbished Mac Pros available for up to $600 off the cost of new models. An Apple one-year warranty is included with each Mac Pro, and shipping is free. The following... Read more
21-inch 2.8GHz iMac on sale for $1199, save $...
Amazon has the 21″ 2.8GHz iMac (model #MK442LL/A) on sale for $1199.99 including free shipping. Their price is $100 off MSRP, and it’s the lowest price available for this model. Read more
13-inch 2.5GHz MacBook Pro (Apple refurbished...
Apple has Certified Refurbished 13″ 2.5GHz MacBook Pros available for $829, or $270 off the cost of new models. Apple’s one-year warranty is standard, and shipping is free: - 13″ 2.5GHz MacBook Pros... Read more

Jobs Board

*Apple* Retail - Multiple Positions - Apple,...
Job Description: Sales Specialist - Retail Customer Service and Sales Transform Apple Store visitors into loyal Apple customers. When customers enter the store, Read more
*Apple* iPhone 6s and New Products Tester Ne...
…we therefore look forward to put out products to quality test for durability. Apple leads the digital music revolution with its iPods and iTunes online store, Read more
*Apple* iPhone 6s and New Products Tester Ne...
…we therefore look forward to put out products to quality test for durability. Apple leads the digital music revolution with its iPods and iTunes online store, Read more
*Apple* iPhone 6s and New Products Tester Ne...
…we therefore look forward to put out products to quality test for durability. Apple leads the digital music revolution with its iPods and iTunes online store, Read more
*Apple* Retail - Multiple Positions, Willow...
Job Description: Sales Specialist - Retail Customer Service and Sales Transform Apple Store visitors into loyal Apple customers. When customers enter the store, Read more
All contents are Copyright 1984-2011 by Xplain Corporation. All rights reserved. Theme designed by Icreon.