If tech giant, Apple Inc. was forced to manufacture in the US an iPhone could cost as much as $30,000 provided the infrastructure is in place. The main difference is not about navigating labour prices but about the gap in supply chain and more so about the required skills to manufacture an exponential number of devices every year.
The ever-increasing market for iPhones, consumers demand high-quality devices makes this reality an obstacle in manufacturing within US. In a candid revaltion, Apple CEO Tim Cook underscored the stark skill gap in the U.S. manufacturing ecosystem.
Cook challenged the outdated narrative that companies go to China for cheap labor. “China stopped being the low labor cost country many years ago… The real reason is the skill, and the quantity of skill in one location,” he said. He further highlighted the acute shortage of precision tooling engineers in the U.S, a profession that blends artisanal craftsmanship with state-of-the-art engineering.
The cost of a US manufactured iPhone also alludes to the Chinese alternative as the Asian tech-giant has pioneered the development of these skills. Dominating for the past three decades over the US in terms of labour cost and human resource, the contemporaries have gone the other direction to de-emphasise them.
As per Tim Cook, even if the U.S. were to start building these capabilities today, it would take a generation to reach the scale required. Manufacturing iPhones domestically could reduce output by 90–99%, drastically increase costs, and cripple Apple’s ecosystem.
Taking in perspective the Trump tariff regime and a steep hike in reciprocal tariffs, import costs may increase rapidly. After auto-giant Stellantis temporarily shut down its operations in Mexico and Canada, car prices too were expected to rise $4,500. Furthermore, the decision also left over 900 employees without a job or income.
If Apple were forced to manufacture in-house, it would not only cripple the ecosystem but also show the mirror on backfiring protectionist policies.