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 )

 
AAPL
$111.78
Apple Inc.
-0.87
MSFT
$47.66
Microsoft Corpora
+0.14
GOOG
$516.35
Google Inc.
+5.25

MacTech Search:
Community Search:

Software Updates via MacUpdate

Monolingual 1.6.2 - Remove unwanted OS X...
Monolingual is a program for removing unnecesary language resources from OS X, in order to reclaim several hundred megabytes of disk space. It requires a 64-bit capable Intel-based Mac and at least... Read more
NetShade 6.1 - Browse privately using an...
NetShade is an Internet security tool that conceals your IP address on the web. NetShade routes your Web connection through either a public anonymous proxy server, or one of NetShade's own dedicated... Read more
calibre 2.13 - Complete e-library manage...
Calibre is a complete e-book library manager. Organize your collection, convert your books to multiple formats, and sync with all of your devices. Let Calibre be your multi-tasking digital librarian... Read more
Mellel 3.3.7 - Powerful word processor w...
Mellel is the leading word processor for OS X and has been widely considered the industry standard since its inception. Mellel focuses on writers and scholars for technical writing and multilingual... Read more
ScreenFlow 5.0.1 - Create screen recordi...
Save 10% with the exclusive MacUpdate coupon code: AFMacUpdate10 Buy now! ScreenFlow is powerful, easy-to-use screencasting software for the Mac. With ScreenFlow you can record the contents of your... Read more
Simon 4.0 - Monitor changes and crashes...
Simon monitors websites and alerts you of crashes and changes. Select pages to monitor, choose your alert options, and customize your settings. Simon does the rest. Keep a watchful eye on your... Read more
BBEdit 11.0.2 - Powerful text and HTML e...
BBEdit is the leading professional HTML and text editor for the Mac. Specifically crafted in response to the needs of Web authors and software developers, this award-winning product provides a... Read more
ExpanDrive 4.2.1 - Access cloud storage...
ExpanDrive builds cloud storage in every application, acts just like a USB drive plugged into your Mac. With ExpanDrive, you can securely access any remote file server directly from the Finder or... Read more
Adobe After Effects CC 2014 13.2 - Creat...
After Effects CC 2014 is available as part of Adobe Creative Cloud for as little as $19.99/month (or $9.99/month if you're a previous After Effects customer). After Effects CS6 is still available... Read more
Evernote 6.0.5 - Create searchable notes...
Evernote allows you to easily capture information in any environment using whatever device or platform you find most convenient, and makes this information accessible and searchable at anytime, from... Read more

Latest Forum Discussions

See All

Make your own Tribez Figures (and More)...
Make your own Tribez Figures (and More) with Toyze Posted by Jessica Fisher on December 19th, 2014 [ permalink ] Universal App - Designed for iPhone and iPad | Read more »
So Many Holiday iOS Sales Oh My Goodness...
The holiday season is in full-swing, which means a whole lot of iOS apps and games are going on sale. A bunch already have, in fact. Naturally this means we’re putting together a hand-picked list of the best discounts and sales we can find in order... | Read more »
It’s Bird vs. Bird in the New PvP Mode f...
It’s Bird vs. Bird in the New PvP Mode for Angry Birds Epic Posted by Jessica Fisher on December 19th, 2014 [ permalink ] Universal App - Designed for iPhone and iPad | Read more »
Telltale Games and Mojang Announce Minec...
Telltale Games and Mojang Announce Minecraft: Story Mode – A Telltale Games Series Posted by Jessica Fisher on December 19th, 2014 [ permalink ] | Read more »
WarChest and Splash Damage Annouce Their...
WarChest and Splash Damage Annouce Their New Game: Tempo Posted by Jessica Fisher on December 19th, 2014 [ permalink ] WarChest Ltd and Splash Damage Ltd are teaming up again to work | Read more »
BulkyPix Celebrates its 6th Anniversary...
BulkyPix Celebrates its 6th Anniversary with a Bunch of Free Games Posted by Jessica Fisher on December 19th, 2014 [ permalink ] BulkyPix has | Read more »
Indulge in Japanese cuisine in Cooking F...
Indulge in Japanese cuisine in Cooking Fever’s new sushi-themed update Posted by Simon Reed on December 19th, 2014 [ permalink ] Lithuanian developer Nordcurrent has yet again updated its restaurant simulat | Read more »
Badland Daydream Level Pack Arrives to C...
Badland Daydream Level Pack Arrives to Celebrate 20 Million Downloads Posted by Ellis Spice on December 19th, 2014 [ permalink ] | Read more »
Far Cry 4, Assassin’s Creed Unity, Desti...
Far Cry 4, Assassin’s Creed Unity, Destiny, and Beyond – AppSpy Takes a Look at AAA Companion Apps Posted by Rob Rich on December 19th, 2014 [ permalink ] These day | Read more »
A Bunch of Halfbrick Games Are Going Fre...
A Bunch of Halfbrick Games Are Going Free for the Holidays Posted by Ellis Spice on December 19th, 2014 [ permalink ] Universal App - Designed for iPhone and iPad | Read more »

Price Scanner via MacPrices.net

The Apple Store offering free next-day shippi...
The Apple Store is now offering free next-day shipping on all in stock items if ordered before 12/23/14 at 10:00am PT. Local store pickup is also available within an hour of ordering for any in stock... Read more
It’s 1992 Again At Sony Pictures, Except For...
Techcrunch’s John Biggs interviewed a Sony Pictures Entertainment (SPE) employee, who quite understandably wished to remain anonymous, regarding post-hack conditions in SPE’s L.A office, explaining “... Read more
Holiday sales this weekend: MacBook Pros for...
 B&H Photo has new MacBook Pros on sale for up to $300 off MSRP as part of their Holiday pricing. Shipping is free, and B&H charges NY sales tax only: - 15″ 2.2GHz Retina MacBook Pro: $1699... Read more
Holiday sales this weekend: MacBook Airs for...
B&H Photo has 2014 MacBook Airs on sale for up to $120 off MSRP, for a limited time, for the Thanksgiving/Christmas Holiday shopping season. Shipping is free, and B&H charges NY sales tax... Read more
Holiday sales this weekend: iMacs for up to $...
B&H Photo has 21″ and 27″ iMacs on sale for up to $200 off MSRP including free shipping plus NY sales tax only. B&H will also include a free copy of Parallels Desktop software: - 21″ 1.4GHz... Read more
Holiday sales this weekend: Mac minis availab...
B&H Photo has new 2014 Mac minis on sale for up to $80 off MSRP. Shipping is free, and B&H charges NY sales tax only: - 1.4GHz Mac mini: $459 $40 off MSRP - 2.6GHz Mac mini: $629 $70 off MSRP... Read more
Holiday sales this weekend: Mac Pros for up t...
B&H Photo has Mac Pros on sale for up to $500 off MSRP. Shipping is free, and B&H charges sales tax in NY only: - 3.7GHz 4-core Mac Pro: $2599, $400 off MSRP - 3.5GHz 6-core Mac Pro: $3499, $... Read more
Save up to $400 on MacBooks with Apple Certif...
The Apple Store has Apple Certified Refurbished 2014 MacBook Pros and MacBook Airs available for up to $400 off the cost of new models. An Apple one-year warranty is included with each model, and... Read more
Save up to $300 on Macs, $30 on iPads with Ap...
Purchase a new Mac or iPad at The Apple Store for Education and take up to $300 off MSRP. All teachers, students, and staff of any educational institution qualify for the discount. Shipping is free,... Read more
iOS and Android OS Targeted by Man-in-the-Mid...
Cloud services security provider Akamai Technologies, Inc. has released, through the company’s Prolexic Security Engineering & Research Team (PLXsert), a new cybersecurity threat advisory. The... Read more

Jobs Board

*Apple* Store Leader Program (US) - Apple, I...
…Summary Learn and grow as you explore the art of leadership at the Apple Store. You'll master our retail business inside and out through training, hands-on experience, Read more
Project Manager, *Apple* Financial Services...
**Job Summary** Apple Financial Services (AFS) offers consumers, businesses and educational institutions ways to finance Apple purchases. We work with national and Read more
*Apple* Retail - Multiple Positions (US) - A...
Sales Specialist - Retail Customer Service and Sales Transform Apple Store visitors into loyal Apple customers. When customers enter the store, you're also the Read more
*Apple* Retail - Multiple Positions (US) - A...
Sales Specialist - Retail Customer Service and Sales Transform Apple Store visitors into loyal Apple customers. When customers enter the store, you're also the Read more
*Apple* Retail - Multiple Positions (US) - A...
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.