Apple asked manufacturing partners to explore making iPhones in the U S


Nordnet Baritof
Nordnet Baritof
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2016-11-18 12:19:21

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Apple asked manufacturing partners to explore making iPhones in the U S

Foxconn, Apple’s key manufacturing partner, is among a number of supply chain companies that are said to be exploring the potential to relocate iPhone production facilities from Asia to the U.S., according to a report in Japanese newspaper The Nikkei.

The report comes in the wake of the U.S. election and promises that the winning candidate made in the lead-up to it. U.S. President-elect Donald Trump criticized Apple’s overseas production capabilities a number of times during his campaign, citing lost jobs for America, pledging, for example, “We’re going to get Apple to build their damn computers and things in this country instead of in other countries.”

While Trump has not communicated an official policy on bringing manufacturing jobs back to the U.S., Apple has reportedly already made early enquiries to assess what options, if any, may be possible.

The Nikkei claims that Foxconn “has been studying the possibility” of opening manufacturing facilities on U.S. soil. Pegatron, another key producer of Apple components, is said to have rejected the suggestion up front on account of the increased costs associated. Apple already has invested in some hardware production to the U.S. with a Mac facility in Texas.

Foxconn declined to comment on the report. Apple has not responded to a request for comment.

The Nikkei reports that Apple made its U.S. product requests to those crucial supply partners as early as June, which would have placed the conversations squarely in the middle of the Presidential campaign period, when many of these issues about foreign production and tariffs were swirling.

One of Trump’s main soundbites was a proposal to increase international trade tariffs to discourage imports and move jobs and production back to America, hiking import taxes as high as 45 percent on Chinese-made goods.

 

However, as with many claims and promises made during the campaign, we’ll have to see just how whether any of these will realistically pan out. (Trump is known for bombastic platitudes. He once also also urged Americans to boycott Apple products following its deadlock with the FBI over an order to unlock an iPhone used by one of the San Bernardino shooters.)

The President-elect’s stance on trade has already drawn criticism from China, where a state-owned paper editorialised that iPhone sales in the country could get negatively impacted in retaliation.

Apple’s orders are said to account for half of Foxconn’s business, so perhaps it is not hugely surprisingly that the Taiwanese company is at least open to looking into the possibility of relocating some of its work to appease any political pressure that Apple may be facing or preparing to face.

There is more to the question than politics, of course, including figuring out the economies of making iPhones in the U.S. and how easy and possible it would be to make these in a new country in terms of labor conditions and expertise, and what part of the production process would move (assembly versus component making, for example).

Together, Foxconn and Pegatron produce more than 200 million iPhones per year to satisfy demand for the iconic Apple smartphones worldwide.

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