Donald Trump's Plan for Apple to Make iPhones in US Could Increase Prices
Donald Trump wants Apple to build its products in the United States rather than China. If Apple does listen to Trump's request, products like the iPhone could increase greatly in price.
Trump is trying to get Americans who are frustrated with the poor job market excited about the future of the country with more U.S.-based jobs and production, CNet reports.
Apple designs its iPhones, iPad tablets and Mac computers in the U.S., but almost all of the actual products are made by partners in China and Chinese factory workers. Only one model of the Mac computer is actually made in the U.S.
Trump said if he is elected he would force Apple to make the products in the United States.
"We're going to get Apple to build their damn computers and things in this country instead of in other countries," he said in a speech on Monday at Liberty University in Virginia.
Apple Would Have to Pay Higher Wages
However, by basic calculations an iPhone built in the U.S. would come with a hefty price tag because of labor laws.
A worker at the Foxconn factory in China where iPhones are built gets paid $400 per month before overtime, according to the New York Times.
If Apple had to pay a worker in the U.S. the legal minimum wage, the monthly wages it would have to pay would double at the least. If Apple employed a worker in Georgia or Wyoming and had them work 40 hours per week where the minimum wage is $5.15 per hour, they would have to pay that worker $824 per month. If Apple decided to make the iPhones in its home state of California where the minimum wage is $9 per hour, they would have to pay full time workers $1,400 per month.
Apple would need a large group of qualified workers in the U.S. that had the capability to build iPhones. They would also need workers who would be willing to work for minimum wage. These are two needs that seem very unrealistic.
A $1,300 iPhone
By doubling the cost that it would take to build iPhones, the price of an entry level iPhone 6s could jump from $650 to $1,300 or even more.
"Twice as much is conservative," Carolina Milanesi, an analyst at Kantar Worldpanel, said about an iPhone built in the U.S.
Apple does build the Mac Pro in the U.S. and invested $100 million to make that happen. Additionally, Apple purchases some of its computer parts from U.S. companies like Intel.
A "Made in the USA" iPhone does not seem possible. The extreme cost passed down to consumers would ruin the popularity of the iPhone.
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