Why Making Apple iPhones in America Is So Hard | WSJ

Why Making Apple iPhones in America Is So Hard | WSJ


(upbeat music) – [Narrator] Which one
of these Apple gadgets is the odd one out? Did you get it? The answer is this 2013 Mac Pro. Not because it looks like a trashcan but because it’s the only one
that was assembled in the USA. The others were assembled in China. Why is that important? – Apple makes their product in China. I told Tim Cook, who’s a friend
of mine, who I liked a lot, “Make your product in the United States. “Build those big beautiful plants “that go on for miles, it seems.” – [Narrator] President Trump, who is currently in the midst
of a trade war with China, wants these Apple products
to be more like this one. Actually, he wants them to
be fully made in the USA. But Apple, one of the companies most exposed to the trade war, has one of the largest,
most deeply-integrated global supply chains. So could Apple ever move
production back to the US? – We’ve taxed China on $300 billion worth of goods and products
being sold into our country. – [Narrator] Trump’s threat
of imposing fresh tariffs could drive the cost of Apple’s
iPhone XS up by about $40. Fortunately for Apple, that
tariff has been postponed until December 15th, and an earlier round of tariffs on circuit boards and computer chips has had minimal impact on the company. As China and the US keep
fighting over trade, Apple is already moving
some of its production to avoid tariffs and trade duties, like to India, for example, where many of Apple’s major
suppliers are relocating. That’s no mean feat. The company moved production
out of US years ago, building a global supply network. It lists suppliers in over 25 countries, with some parts made in
China since the early 2000s. – [Tim] The way that I view this is the vast majority of our products are kind of made everywhere. Largely I think that will carry the day in the future as well. – [Narrator] Others before Trump have tried to get Apple to
bring jobs back to America. President Obama reportedly
asked Steve Jobs what it would take to
make iPhones in the US, to which Jobs said, “Those
jobs aren’t coming back.” – Will there be an Apple product ever made again in the United States? – I want there to be. – So will there ever say on
the back of an Apple product, “Designed in California,
assembled in the United States”? – It may. – [Narrator] The company has tried before. Remember that Mac Pro? – It is designed by brilliant
engineers in California and assembled here in the USA. (audience cheers) – [Narrator] A series of debts at its main supplier’s factory raised questions over
working conditions in Asia, so the company invested $100 million to assemble the Mac Pro in Austin, Texas. – The reason the Mac
Pro was made in the US, that’s because it’s a
pretty low-risk product. It’s not making a ton of these. So it could move it here, test, and see if it could do US manufacturing. And if so, then it could
explore the opportunity for other products. – [Narrator] But the
plan in Austin had issues when it came to locally
sourcing enough components for the production of the
Mac Pro, leading to delays. So what did the company do? They imported some of
the parts from China, where manufacturers had capacity
to keep up with demands. – How many tool and die makers
do you know in the US now? I could call a meeting around
the United States and say, “Will every tool and die maker
come to this room tonight?” and we wouldn’t fill the room. In China, you would need several cities. – [Narrator] Recently,
production in the Austin plant has fizzled out. And production of the new Mac Pro– – This is the new Mac Pro. – [Narrator] Has been
relocated back to China, according to people
familiar with the plans. – With the new Mac Pro,
it’s not hard at all to shift production back to China. This is Apple’s playbook, right? They perfected the art of
making things in China. So transitioning the Mac Pro
or any other product to China makes a lot of sense for them. – [Narrator] So what are Apple’s choices if they want to navigate the tariffs? They have three options. Given how expensive and
complex moving out is, Apple may just decide to stay in China and at some point potentially pay tariffs, which would likely make Apple
products more expensive. Or Apple could move
manufacturing, just not to the US. India and Vietnam are
only two of the countries that are hoping to lure
Apple and its suppliers. Finally, the company could
strike an agreement with Trump. – Tim was talking to me about tariffs. And one of the things
that he made a good case is that Samsung is their
number one competitor and Samsung is not paying tariffs because they’re based in South Korea. It’s tough for Apple to pay
tariffs if they’re competing. And I thought he made a
very compelling argument, so I’m thinking about it. – [Narrator] In July, Cook
said tariff exclusions are key for Apple to make
the new Mac Pro in America. – [Tim] That’s what’s
behind the exclusions. So we’re explaining that and
hope for a positive outcome. – [Narrator] We contacted Apple following the latest round of tariffs, but the company declined
to comment further. Apple hasn’t recently moved
any of its manufacturing back to the US, but it says it spent $60 billion with 9,000 US suppliers
and companies last year, supporting 450,000 jobs. They’re even building a new
campus in Austin, Texas, the same city where that Mac Pro is no longer being assembled.

100 thoughts on “Why Making Apple iPhones in America Is So Hard | WSJ

  1. Did a wall street journal video just refered the iPhone 10 s as "ex" s"???

  2. Tldw; workers have rights in the USA

  3. She said : Trump , and when she spoke about Obama she said : president Obama.

  4. 0:26 I think what you was ment to say was «Tim Apple»

  5. Na. They will still buy all the components from China but assemble it in India or elsewhere. This is how they avoid the tariffs. And anyway moving the assembly to the US will only create cheap jobs for migrant workers.

  6. Apple is a waste of money

  7. so people in China rely on the USA to get jobs? if china was capitalist they wouldn't have to rely on us

  8. Because they’ll actually have to pay appropriate tax and pay their workers a decent wage?

  9. The map of Israel is not correct, Palestine does not exist.

  10. This should of been a 10 second video. ITS TOO EXPENSIVE TO PRODUCE IN AMERICA END

  11. 'Assembled in' s not the same as 'made in'. Assembled means the product was put together in the US using a bunch of imported hardware made in 3rd world countries. Assembly jobs are the lowest paid of the technical jobs.

  12. If it's easy, Apple would have done it long ago. It's just don't make economic sense.

  13. India is China's new China. It will be even more lucrative to relocate to India.

  14. It’s not only about labor, it’s about rare earth metals and semiconductors. In China the reserve of rare metals is around 44 million tonnes, while in the US the reserve is around 1.4 million tonnes only.

  15. Yeah … bringing low wage, high skill labor back to the USA is a pipe dream. China's rising living standards is also pricing them out of the mass manufacturing game, people are leaving cities and going back to their rural villages and factories are having to import high skill, low wage labor from Vietnamese immigrants to meet the demand from USA/EU … the kind of low wage, high skill labor that the 1st world extreme profit margin businesses need to meet their growth goals is coming from Vietnam, India, Italy and Mexico at the moment (speaking from personal experience).

    Literally no one I know of is moving the kind of mass manufacturing from China to the USA because of Trump's trade wars. They're just moving sideways into other affordable labor markets until he's out of office. China's slowly shifting more towards customized, higher detail manufacturing, which is exactly what we have left over in the US after our living standards got too high to meet the demands of capitalist for-profit businesses.

  16. Because $

  17. I appreciate that to Apple move usa

  18. I don't like any China product

  19. It’s not that hard

  20. Yes, more low-value-added manufacturing. That's just what we need.

  21. “There aren’t many tool and die makers in the US.”

    What a wretched argument against moving manufacturing back to the US.

  22. China Numba Wan

  23. I think Apple is going to struggle getting a quality product in the USA and even India if they move locations. The US is too complex and in a city like Austin, there’s always another job so why subject yourself to strict working conditions. India is a very different environment. They are not nearly as equipped to handle very expensive products and I think I speak of the rest of us that seeing “Made in India” on an iPhone would look a lot worse than “Made in China”. It would be ideal to have more jobs in America, however these jobs are not jobs for Americans. Americans specialize in a variety of goods. Labor jobs like the ones Apple has the Chinese do, condition wise, were abolished in America, that’s why we have unions. Personally, I think America needs more jobs, but capitalism has afforded us the ability to have a very large percentage of jobs that are high skilled jobs. Our specialty isn’t fast and high volume assembly lines with strict quotas and strict life requirements. Our specialties are generating new streams of global commerce, producing new products to everyday problems. American business has become problem solving, and that’s worth a lot.

  24. Fat finger muricans can't assemble delicate hardware.

  25. Automation will bring manufacturing back to the states so they won't have to worry about supply chains etc

  26. TLDR no

  27. my iPhone is designed in California made in Brasil

  28. You just got one thing wrong… India's map! It's incomplete

  29. Without China Apple would cease to exist.

  30. We can barely make American flags in America, make tech is a whole ball of wax

  31. Apple will lose to china in the very near future. Their smart phones and computers are on top of the world now

  32. Manufacturing can be brought back to first world countries when automation has become the norm and people don't actually work anymore.

  33. Give more work to the robots. They are not complaining

  34. Because then people would know the actual cost of an Iphone.

  35. everyone now tryna be vox now smh

  36. Trump acts like most of the things he owns weren’t made in China…

  37. No, no company wants to pay living wages.

  38. God forbid some human decency, gotta get those precious dollars

  39. In my opinion this is precisely why we need tariffs. If Samsung makes their products in South Korea, Apple should make their products in the USA. If we can’t compete then we have a much bigger problem! We are no longer on the cutting edge or our trade secrets are being exported out! Protect our intellectual property and cutting edge technology and everyone will want to buy our product even if they are more expensive. You have to produce a better product. Our problem is that we have stopped innovating and instead focused on cutting costs to provide a cheaper product. That’s precisely how Samsung and now China have managed to catch up!

  40. Hi from Hongkong 🇭🇰
    America to greedy its not how much you sell it for Its much product you can move at good price!!
    If it does get made in America you Americans better get prepared to pay double the price!!
    Never buy nothing from America its way overpriced for everything there?

  41. Tim Apple needs to up his game and

  42. And cmon America. Youre among the most developed countries in the world. You don't need factories, or coal mines or shitpits; there are greater jobs that can make more money…

  43. If you look at the prices of Apple, you would actually think that the products are manufactured to high standards, but above all, that the high prices comes from fair and well-paid workers. We all know that, unfortunately, is not so and it is rather reversed, namely that the high cost is not meaningful have about the quality of the product and whether it was made by fairly paid-workers

  44. Apple made in CCP!!! Data privacy disabled by CCP devices.😏😏

  45. It's not up getting paid so people could buy more I know this market revenue

  46. New Mac Pro is made in Austin, Texas.

    https://www.apple.com/newsroom/2019/09/apples-new-mac-pro-to-be-made-in-texas/#targetText=The%20latest%20generation%20Mac%20Pro,be%20manufactured%20in%20Austin%2C%20Texas.

  47. They can move out of China… And to India … Never US

  48. Designed in California, Assembled in USA
    Price tag : $3000 for iphone 11 pro basic model…

  49. Admit it Samsung is way better than Apple…. or any chinese mobie company's

  50. This kind of companies are Globalists in their core most be shot down.

  51. Why not just make in both USA and China and sell them side by side, USA $3000, China $1000. See which one is best seller.

  52. its not hard at all , apple would just get a smaller profit. thats all. Being Greedy wins. Just add a few nets to prevent suicides and you are fine.

  53. With the advancement of AI and economies of scale, it would eliminate outsourcing so companies will eventually move back to the country they’re from.

  54. We tax China….hahaha!! Does Trump even know who’s paying the tax?

  55. Unions is #1. It’s cheap to make in China. All companies do it and it’s horrible.

  56. Sooo is it possible for US to rebuild the whole industry???

  57. You cant find a ton of tool and die makers in the US any more because companies like Apple moved all the production out of the country…Why would there be a ton of them when there isnt a market in the US?

  58. Who cares about iphone there phones suck. I switched to a note 8 and really happy with it.

  59. Hollywood would be a lot better if VIRGINIA were removed from Satellite Communications not to mention important news for family and friends domestically and internationally. Any doubts?

  60. Cost would be very high. China and indian workplace iss too cheap.Would help in cost cutting and that's what every company wants

  61. It's simple, they don't want to lose the 80-90% margin they have with each product they sell

  62. Doubt USA people would work for 1 US Dll. A month. Someone like Trump should know that since he is a "business" man.

  63. I would prefer buying from the US and not from China. US has its problems but it’s the culture that fits me the most. US movies and everything made my childhood and I love it ❤️ besides I’m gay that it’s something not acceptable in Asia

  64. Not a fan of apple🍎

  65. So…people who are willing and able to spend $1,000 on a damned PHONE, won’t spend another $40 if it’s made in the USA? Really??

  66. Apple moves to India. loooooooooooooooooooooooooooooooooool

  67. Companies should move more manufacturing to mexico. I’ve seen more and more companies make the change and if you think about it, it’s a no brainer. Labor would be more cost effective than if it were manufactured in the US and it would help support jobs with our neighbor, hopefully softening the immigration crisis. Product transport would be quicker, cheaper and better for the environment as well.

  68. Why making iPhones in China is so easy:

    Cheap labor

  69. The mark-up on Apple products is already so high that a tariff would only take away slightly from Apple's profits. It shouldn't lead to higher prices.

  70. Apple would never do that tho cuz it would cost way too much lol

  71. 🤦‍♂️ Its pronounced “ten – (S)” Its a roman numeral? Have you ever heard of roman numerals? I think you should check google or wikipedia for more info on roman numerals. Its pronounced “ten,” not “ex”

  72. Of course they can. The Iphone Xs costs ~500 to make and sells for ~1000. They make 500 profit PER PHONE. Making 460 would be just fine. Making just 100 would be too….

  73. if they move it to vietnam and india they may acually almost do the same to their pricing

  74. I’m the 9thousandth like! Literally! Lol I dislike it, goes back to 8.9k then back to 9k 😹

  75. I like this comment section. It seems like everyone realizes this is a horrible idea lol

  76. Tim Apple.

  77. Americans gave up manufactering since Reagan.

  78. Because Western people demand to much for very little effort.

  79. Because Western people demand to much for very little effort.

  80. Apple CEO should be in prison!

  81. That Mac Pro looks like an air-conditioner ….

  82. Donald Trump, the symbol of Made in the USA. Just check his MAGA hats and his brand of ties.

  83. You had me until you brought Trump into this. Bye

  84. He’s doing what he promised to do what’s the big deal?

  85. From trashcan to cheese grater.

  86. China is Communist and Hates America. Enough said…

  87. When talking and farting are the same oops lol

  88. I don’t understand why people care if it’s made in China or USA

  89. make 3000 dollar

  90. China doesn’t deserve any tech companies from U.S.

  91. Stop buying apple phones, prices will come down.

  92. Manufacturing moved out of the us for a reason

  93. Not only the China has lower labor cost, that's just one thing, China has very mature supply chain. Manufacturing is a complicated industry.

  94. apple should design housing. This industry needs a revolution its stuck in the dark ages. Like steve Jobs said make stuff that people need*, I would still love the mac pro

  95. simply because they can’t pay the average American $3.15 an hour

  96. 1:10 "iPhone "ex"S

  97. Why’d they move to India the company already has so much pollution it’ll make it more unsafe

  98. What if airpods pro are made in the USA suddenly you lost the eartips then you have to pay for $60.00 🤣

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