Major iPhone supplier Foxconn has been studying the possibility of moving production of the device to the United States. That’s according to a new report from the Nikkei Asian Review.
Foxconn makes the vast majority of iPhones in its massive campuses across China. Here’s more from the report:
“Apple asked both Foxconn and Pegatron, the two iPhone assemblers, in June to look into making iPhones in the U.S.,” a source said. “Foxconn complied, while Pegatron declined to formulate such a plan due to cost concerns.”
Even though Foxconn has been studying a move, there’s a substantial barrier:
Another source said that while Foxconn had been working on the request from Apple Inc., its biggest customer that accounts for more than 50% of its sales, Chairman Terry Gou had been less enthusiastic due to an inevitable rise in production costs.
“Making iPhones in the U.S. means the cost will more than double,” the source said.
Yep, it's about politics
The site’s sources say that Apple exploring the move boils down to politics as President-elect Donald Trump may force the company to move at least some parts of production back to the United States. But that seems to be easier said than done:
An industry executive familiar with the iPhone production process also said it would be difficult to produce the device in large quantities in the U.S.
“To make iPhones, there will need to be a cluster of suppliers in the same place, which the U.S. does not have at the moment,” the executive said. “Even if Trump imposes a 45% tariff, it is still possible that manufacturers will decide to continue production overseas as long as the costs together with the tariffs are lower than the amount they need to spend on building and running production lines in the U.S.”
I personally think Apple is just covering its bases exploring such a move and that it will likely not occur. No matter your political leanings, most people aren’t going to pay substantially more for the same iPhone made in the United States. It’s that simple.