President Donald Trump is trying to get smartphone companies to manufacture in the U.S. and Apple seems to have his special attention in this regard. The company is a major global smartphone player and has a large share of the U.S. cell phone market.
Trump says he spoke to Apple CEO Tim Cook, who has his “eyes open” to manufacturing in the U.S. For its part, Apple has not issued any confirmation on plans to manufacture iPhones in the country, but if the company were to do so, what would be the cost of the “Made in America” label?
The company might charge $100-200 more than it already does for iPhones that are domestically manufactured, according to Brian White, an analyst who heads the technology hardware and software department at Drexel Hamilton, a New York City institutional brokerage firm.
According to White, Apple could set up manufacturing infrastructure in the U.S. and charge a special premium for phones coming off that production line, while charging the same prices it does globally for iPhones manufactured at lower cost by Chinese manufacturers such as Foxconn.
If Apple sells U.S. made iPhones at current costs — the 32GB iPhone 7 for $649, or the 256GB version for $849 — it stands to incur a loss despite expected incentives and tax cuts.
Trump’s initiative to manufacture in the country sounds very good on paper, but the president is yet to come out with exact plans to help manufacturers move production units to 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,” Apple CEO Tim Cook told CBS’ 60 minutes in 2015.
The iPhone is currently manufactured in China, using parts from different suppliers such as processors from Taiwan Semiconductor Manufacturing Co., displays from Japan Display and memory chips made by South Korean firm SK Hynix. To move all these industries to the U.S. would be, at the very least, a daunting task.