In the midst of a pricing war, Donald Trump has a clear request for Apple and, according to him, would prevent prices from importing China's iPhone: making them in the United States. It is an idea that Apple has already twisted in the time of Steve Jobs and that, years later, It's always unacceptable.
Consequently, according to several media such as Financial Times or Bloomberg, Apple will bet (almost) all in India. In the neighboring country in China, the company led by Tim Cook opens new assembly factories for eight years. Now, they want the country to provide all the iPhone in the United States and, although it is complex and much less a complete solution, clearly aims to be the best option for Apple.
India is not the complete solution, but the best way
Apple has invested new factories in India since 2017. The idea was to assemble products with which a local market in full ascending trend and, in the long term, to diversify manufacturing worldwide to reduce dependence in China. For this year, it was expected that 23% of the iPhone made in the world would come from there, but Forecasts have increased.
India He also established import prices in the United StatesAlthough considerably lower than those of China because they are 26%. Although they are rates to take into account, they are currently on a break and, at least for the moment, Apple can also benefit from the temporary price exception that Trump has decreed.
Before the price crisis Objective of demanding American consumers. To do this, they hope to close the current year with 50 million iPhone assembled in the country and against 2026, it should be 60 million.
It must be said that It is not a definitive and complete solution to the price problem. Analysts such as Mark Gurman think that, even by making forecasts, Apple will find it difficult to provide all the demand in the United States with what comes from India. The company plans to launch terminals so far with elements unpublished in its production, such as the folding iPhone and it is something which, in the words of the aforementioned analyst, will not be able to build outside China. “At least from the start,” he said.
Why does Apple not make in the United States?
As we indicated at the beginning, the Californian company raised this option, but He is worried beyond the economy. At this stage, experts from the Bank of America have already estimated that the cost of production would increase by 90% and even more, but there are other reasons for taking into account.
Pass any production in the United States I could take investment decades in Apple For all this, it implies. It is not only a question of raising the factories and conditioning them, but also of finding adequate staff and which can have a good geographic location concerning your work. In China, there are annexes built in factories where they have rooms and gymnasiums so that workers can live nearby.
The transfer of components in the United States would also be complex, because Apple already has a supply chain which includes up to 40 countries and most come from Asia (hence another point of convenience for India). Could Apple ask your suppliers to move? Yes, but there is already It does not depend on the company.
Foxconn, of Taiwanese origin, is Apple's main partner for the manufacture of the iPhone in China and India. For years, it has adapted to Apple requests, such as the expansion of installations in China or the opening of new factories in India. However, They must also become profitable Diversification
There will be those who think that the solution is to reach agreements with other suppliers and partners. However, this is not possible either. Not at least completely and The supply of micropuces is the best example. The SOCs that assemble Apple devices come from TSMC factories in Taiwan. This company has already opened a factory in the United States by the hand of Apple precisely, but for the moment its manufacture of “mass” is much lower than that which they obtain in their country of origin. They currently assemble processors from previous generations and which configure the devices with much less request than the iPhone.
74 hand fixed screws on the iPhone
It seems a lie, but iPhone screws are the best example of the complexity of the assembly of these devices … As they reveal in financial times, already differently compared to the process of other manufacturers, Apple does not use glue to reach the chassis of the device, but the screws. More specifically, 74 units.
Imagen: Ifixit
Analysts think Foxconn comes out More profitable rental staff than to search for automated solutions like robots. If it were made in the United States, Apple should hire dedicated personnel only and exclusively to this work as already happens in China and India, which would increase not only the costs of the staff, but could also be complex in the hiring process.
And the screws are the best examples of the case, but not the only one, because they are 2,700 games in which an iPhone is composedFrom these more than 70 pieces in parts such as the battery, the chassis or the screen. The latter is not only composed of the OLED panel, but also other protective plates, touch panels and several sensors coupled with it (such as TREDEPTH which allows facial recognition of facial identification).
Only 62 suppliers of these parts have installations in the United States. There are more than 730 suppliers in total and almost all of them are in Asian countries, being China the territory in which they have more facilities, but also in Japan, South Korea, Vietnam or India itself.
And what about the price of the iPhone 17?
The increase in manufacturing forecasts in India will mean an Apple investment an investment than, although less than that estimated if it did in the United States, it could also have an impact on the price of the iPhone. Increase it, of course.
The iPhone 17 In all cases, they will involve an increase in Apple costsEither by the hypothesis of rate rate of the part from China, as well as that of India because of the increase in the investment they had to make. Morgan Stanley experts warn against increase of approximately 10%which would leave the starting price at $ 880 (the current iPhone 16 starts from $ 799).
Other analysts cited by Financial Times warn that Apple could compensate for these price increases Share these increases with their suppliers or abandon the models with the lowest storage. Another way to relieve prices in the United States could be the Price increase in other countriesEven if these apples are not affected by the prices.
Anyway, it is still early to determine what will happen. In fact, on rare occasions, the price of an iPhone was known in advance and, despite the existence of rumors, they ended up denying once Apple made officers. Consequently, given the complex complexion in which the company is found at the moment, it is likely that even in Apple Park, they will be clear about what will happen exactly at the prices of their following flagship products.
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