Steve Jobs' desire for scratch-resistant glass is why the Apple iPhone is not Made in America
At one time, Apple proudly revealed that its products were home made. And if it weren't for the desire of Jobs to have the Apple iPhone display be scratch-resistant, the iPhone might be like the Springsteen classic, "Born in the USA". According to a story in the New York Times, back in 2007, just weeks before the launch of the original Apple iPhone, Steve Jobs was very upset that his baby could get scratched by keys if it were placed in a pocket. He wanted to switch from a plastic display to one made of glass. The only factory that could do such a job at the last moment was the Foxconn plant in Shenzhen. With Foxconn, a midnight note from Apple could turn into production of 10,000 units a day within 96 hours of receiving the order from Cupertino. An anonymous Apple executive said that no American factory could have matched Foxconn's response.
The glass was actually made in Kentucky by a company as Yankee Doodle as they come, Corning. But a factory was needed to cut the glass and in China, a subsidized plant was already expanding in anticipation of the business. The factory started turning out samples and could run 24 hours a day. Apple denies this version of the story, claiming that it requested the punched time cards to make sure that the plant's staff was not working on short notice and at odd hours. Still, factories in China are known to play fast and loose with the truth in order to placate their customer.
Apple currently has 43,000 stateside employees and 20,000 that work overseas. The company earned an amazing $400,000 per employee last year, the most of any company. An additional 700,000 work for other companies like Foxconn and assemble the Apple iPhone and Apple iPad and other products. These factories in Asia and Europe are known for assembling electronics for other companies. Jared Bernstein, who last year was an economic adviser to the White House said, "Apple’s an example of why it’s so hard to create middle-class jobs in the U.S. now. If it’s the pinnacle of capitalism, we should be worried."
Apple now says that U.S. workers lack the education and skill for domestic manufacturing. In addition, current CEO Tim Cook needs the parts chain to be flexible in case quick changes are needed. Foxconn is said to be able to add 3,000 workers at the drop of a hat, something impossible to do in the States. And it is not just Apple. Other manufacturers like Samsung, Sony, Amazon, Dell, HP, Motorola and others depend on Foxconn's factories to turn out product. Boycotting Apple for producing the iPhone overseas would mean boycotting Android and Windows Phone models as well.
source: NewYorkTimes via electronista
1. Numz (Posts: 34; Member since: 31 Oct 2009)
So what can be done and what is being done by our government and these companies to bring these manufacturing jobs back to america? Do companies like Apple even care to bring these jobs to america? Seems like most of the load should rely on the tech companies to bring these jobs back here, we can't rely on the government to solve all our problems but the tech companies such as Apple have to care enough to actually make something happen and some of the responsibility should rely on them.
23. bossmt_2 (Posts: 444; Member since: 13 Oct 2009)
In short, nothing can be done. Only way to start getting companies to make stuff in america is to buy american. But people won't do that because there is either not the option (such as with smartphones, videogame systems etc.) or doing so is more expensive.
31. Early_Grayce (Posts: 2; Member since: 22 Jan 2012)
It's called capitalism baby and it is helped by having to reciprocate in free trade agreements.
Capitalism is about anyone who can make money making as much as possible by buying/producing things at the lowest cost possible and selling them at the highest price the market can bear.
Free trade agreements were made so that items produced within the country can be sold to other countries but did not factor in lower costs of production in other countries nor the ease at which companies would be able to send small high value products around the world. At the time that countries should have been puting up walls limiting imports the political gains that were possible from saying that you could export to the rest of the world were enough to win elections. If this was done at the same time as chasing highly skilled jobs and offering free education to people the benefits and flow-on effects would have been enough to not care about the imports.
2. Giggity (Posts: 147; Member since: 17 Nov 2011)
It's all about minimizing cost and maximizing profit.
36. G2Noobin (Posts: 81; Member since: 17 Dec 2011)
Load of Bu** is what this article is...dont try to make excuses Apple ....regardless C**pple still maintains slave labour and has the Cr-**ple-iest product...in terms of functionality...wake up Noobs!
3. Stoli89 (Posts: 333; Member since: 28 Jun 2010)
It's easy to lie to a president if you're worth billions. The fact is, other manufacturers have plants in Europe (e.g. Finland), Eastern Europe (e.g. Romania), Brazil. Apple chose Foxconn because labor is skilled, flexible, and very very cheap.
Because the added value is not taxed at import to address the labor disparity, Apple and other US companies will continue to move manufacturing in this direction. It's a one way check valve. Steve Jobs cared little for the American middle class...as long as they could still buy his phone on a credit card.
28. stealthd (Posts: 1067; Member since: 12 Jun 2011)
It'd be nice if you had a single reason to claim Jobs was lying.
Try reading the NYT article. It's not just that China is cheaper, it's that they provide such greater scale than is even possible in the United States. They can hire hundreds of thousands of workers and thousands of engineers virtually overnight. Getting the same work force in the US could take over a year.
4. QWIKSTRIKE (Posts: 967; Member since: 09 Mar 2010)
They are scamming us America with this bulls**t America doesn't have enough skilled labor to fulfill these jobs, and that no one can hire 3k jobs at a moments notice. We have millions out of work looking for a job, and thousands showing up for a single job's posting, but you "Apple" and others don't want to pay. The sad part is the media, and our president believe that bull s**t. It's about cheap labor, and unfair labor practices like Foxconn has going on that keep those companies sending lore jobs over seas while workers commit suicide because of unfair work practices out side of the US. I know elect Newt Gingrich and he will hire teenagers to work for free.
I have it why not privatize jails, and make the jail birds work for free while manufacturers like apple can bring that labor home and pay 3.00 a week with no shipping cost from abroad! When they need more free labor they just find a reason to throw your stupid ass in jail, and collect millions for cheap labor fro prisons. It's already happening, can any one say moral hazard. You spit on the side walk, and get 10 years hard labor to support free prison labor. There will be no reason to give parole to petty crime. Not to mention these privatized jail cells are funded by stock on the stock market. The more the stock rises the more the need to send more free labor to jail. Wake UP!
22. Mozarrt (Posts: 297; Member since: 08 Oct 2011)
So thats why you should buy Finnish, Taiwanese or Korean. Because thats how the jobs really stay in America. amirite?
34. QWIKSTRIKE (Posts: 967; Member since: 09 Mar 2010)
Mozarrt I never mentioned anything about buying from other nations genius you did. I never inferred this was a remedy either you did. I think that when stupid remarks like yours echo into public sentiment we discover just how much of a mini mind you really are.
Buying products made by other manufacturers from other nations has "NOTHING" to do with the fact that "AMERICAN" companies are shafting America for cheap labor abroad; while waving a no skills flag while hiring unskilled foreign workers in communist nations for huge profits to buoy their stock prices.
This is not about passing on savings as some have mentioned Apple has made huge margins on the "i products", and that money is passed on to stock holders not the consumer. It is said that Apple has made more than 45% gross profit on that phone so don't for a minute believe they are passing consumers the cost savings. Don't get it twisted either I believe that demand, and prices go hand in hand. If the demand is there and they get high margins then god bless them it's America.
I just believe off shoring American jobs for greed and using unskilled labor as a reason is just as unAmerican as dodging taxes by keeping them off shore. Some people in congress want to revamp the immigration laws to allow foreign workers into America to work for lower wages causing further damage to our economy.....wake up! When we as Americans finally wake up we will be owned by China, and the American work force will be all foreign domestically and abroad....wake up!
5. Stuntman (Posts: 828; Member since: 01 Aug 2011)
When people start purchasing products because they are made in the US, those jobs will not come back. If Apple (or any other company) makes two phones, one made where it is now and one made in the US and both are priced accordingly to give Apple the same amount of profit, the US made one will be more expensive. If people choose to pay that premium (and perhaps a little more) for the US made phone over the overseas made phone, then those jobs will come back to the US. Does anything think that will happen?
6. StephenJobs (Posts: 2; Member since: 22 Jan 2012)
Now all of your fellow American know that how your god "Steve Jobs" treated all of you. You all critic and hate him "Steve Jobs" for not employ you all. I'm know the Americans. Almost all of them are hipockrit. The jobless American yell at Steve Jobs and said that Steve Jobs are not fair. However Steve Jobs, still smilling or laughing loudly, because the jobless American are yelling and picketing at him but on their hands still have Iphone 4s, Iphone 4 or even Iphone 3Gs.....
7. Whateverman (Posts: 3237; Member since: 17 May 2009)
"Apple now says that U.S. workers lack the education and skill for domestic manufacturing."
Bullsh*t! Apple and all these other companies manufacture overseas for one reason and one reason only... To make more money by saving on production cost. I worked at Motorola for years churning out thousands of phones every night right alongside other hardworking educated Americans. Education was never a factor when pinch welding batteries together, ultra sounding housings or placing labels on a phone. Apple takes every potshot it can at it's users, fans and now just the American public in general, but I bet someone below this post is going to come up with some reason why this should be okay. "Apple is a business. They have to make a profit. All the other OEMs are doing it too." blah, blah, blah!
Bottom line is, with all thing considered...it's about 20-30% cheaper to manufacture overseas and everybusiness is out to make as much money as possible. They don't give a sh*t about the American middle class or what we think about them. All that matters to them is that next year's profit margin is bigger than last years. The other 99% can just suck it!
8. MorePhonesThanNeeded (Posts: 645; Member since: 23 Oct 2011)
To add to what you said, the truth is the American worker won't work for such cheap wages to manufacture these devices. You will not find an American working for pennies on the dollar anywhere, and Apple is not willing to pay an American assembly line worker $10-18 an hour to do this work. With full benefits and the like, get serious. Any large American outfit that has to hire workers to do physical labor will not want to do so in good old U.S. of A. Labor laws and Unions are a big deal and they couldn't get away with cheap labor. So run to newly developing countries or countries with lax laws build plants there then export to the U.S. and sell product. They save on manufacturing and make a killing on sales...How much more can Apple call the American Worker an uneducated idiot not fit to assemble their toy phone? Look how they just stated it, and worst yet they make a phone that is basically for the uninitiated, good and bad. But facts are facts people, next time Apple calls themselves an American company, ask yourself what about that company is American aside from the fact that their base of operations is in the US? American built products will cost a lot more than foreign built American branded products. Imagine the cost of iPhone if it was built here, would easily crack $1000 and possibly be $700-800 on contract. The phone is made out of the country cheaply yet it costs almost $700 off contract...say what?
12. Doakie (Posts: 1724; Member since: 06 May 2009)
The iPhone has a 71% profit margin. I'm sure they could manufacture it in the usa and still make a profit. They just wouldn't make $400,000 per employee anymore. They're one of the Greedy Corporations that their iPhone owners protest against.
33. Asiimilator (Posts: 1; Member since: 22 Jan 2012)
This is a problem.....and it crosses over to many other consumers electronic categories such as the car audio market. I've seen several speaker manufactures move manufacturing facilities overseas or had OEM's build the gear and didn't lower the prices to reflect the lower build cost. They just run with the extra profit. This is one reason I REFUSE to by an iPhone. Why should I even pay $100 when I can get a better or similarly spec'd phone for FREE right now? If I wait a few more months I'll have an even BETTER spec'd phone for FREE. Apple needs to drop the prices down to commodity levels....because thats all an iPhone is....a commodity.
35. cellphonator (Posts: 298; Member since: 29 Oct 2011)
Genuine question, no sarcasm: what phone do you buy when you need one?
9. TKFox007 (Posts: 303; Member since: 02 Nov 2010)
That a big, long and winded excuse for a reason to outsource. Apple just doesn't want to build a factory, hire and train thousands of American workers and pay them minimum wage when they can go to China and pay them pennies on the dollar, push the employees to near death or psychotic episodes leading to suicide. Because they know Americans won't let themselves get pushed around like that, and will demand Apple adhere to labor laws and give them health benefits. And that any company nowadays.
10. belovedson (Posts: 832; Member since: 30 Nov 2010)
didnt phonearena do an article about how apple is holding billions overseas to avoid taxes
11. Bluesky02 (Posts: 1439; Member since: 05 Dec 2011)
The simple answer is Asian slave laboring is cheap thats it.
13. vijaysivakula (Posts: 198; Member since: 17 Aug 2011)
So the cost of manufacturing it abroad and importing it to USA and distributing it across is cheaper than the cost of manufacturing it in US and still gives that kind of profit ratios to Apple. Wow.
14. digicon (Posts: 121; Member since: 11 Aug 2011)
It's the same as saying Mexicans are taking away Americans jobs . They're just looking for work . Who's to blame is the Boss that hires them ! for $5 an hour ! rather than hire American for $10 an hour ! They build on Chinese costs , and sell at American costs ! and everyone rejoices because their home is in Cupertino Ca. !
29. dvancleave (Posts: 32; Member since: 19 Jul 2010)
Actually this is a common misconception. Cost savings is the primary reason for companies moving production overseas. But not necessarily to avoid paying the higher wages and benfits for the same work to be done here in the U.S. For some reason big business has been portrayed as evil. And the Democrats feel the need for them to pay for their wrongdoings of being successful and making a profit. So they want to tax the heck out of the companies. Nevermind the fact that every individual legally working for that company is already paying federal, state and local taxes. So the companies decide to move away. In the end, no double-dipping on taxes for the government and people lose their job. Thank the government and NAFTA for that.
Granted there is a serious disparity in what exceutives are making versus the common worker. There is no contesting that CEO's are WAY over compensated. But that is another, separate issue.
15. Owlet (Posts: 447; Member since: 21 Feb 2011)
China is developing pretty rapidly right now. They're probably heading for the same successes and problems that come with them as the USA. So maybe their labor won't be cheap anymore. Jobs will have to come back then.
25. StephenJobs (Posts: 2; Member since: 22 Jan 2012)
Yeh, Jobs have to be come back from the grave, hahaha
39. QWIKSTRIKE (Posts: 967; Member since: 09 Mar 2010)
This is why the new NAFTA opens up trade to Vietnam. WE just bounce from the cheap to the cheapest nation. After Africa falls what nation will be next cheapest nation for labor. NAFTA is killing American jobs, and if the immigration laws get revamped to open the American gates to foreigners for lower wages every one will fail. I know highly qualified engineers looking for work, while employers say that they can't find skilled labor to fill jobs. They can only find low ball wage offers after making 80k a year now the norm is to look for lower wages to fill those jobs that were displaced!
During the Bush administration they imported workers from India under HB1 visas. To keep the import worker working for lower wages CNBC reported they had their work visas confiscated so that they could not look for higher paid jobs. Wake up being told that they can't find skilled labor and importing lower waged engineers to fill American jobs is a scam.
The problem is that in America until the grim reaper shows up at your door no one cares until the bell tolls for you, and then its too late!
41. downphoenix (Posts: 2873; Member since: 19 Jun 2010)
no, they'll just find some other heavily populated poor country to move their manufacturing to.
16. Eingild (Posts: 203; Member since: 19 Apr 2011)
Another reason is that China offers cheap labor.
Expensive iPhone - Inexpensive Manufacturing costs = Large amount of profit
Now you know how Apple makes a lot of money.
17. strident (Posts: 2; Member since: 22 Jan 2012)
It's very difficult to persuade Americans (United States citizens) or any number of European's, that the world is a bigger place than our own backyard. The truth is that top brass of our big corporations neglected to provide quality, to produce what the next generation wanted, or pay attention to complaints. The Japanese gave us a shock but Detroit (to name but one symbol) did not learn or regenerate.
Neither did the public; American's responded to the Hummer in their droves and continued to burn cheap fuel without paying heed to previous crises and endless warnings.
In our School's the younger generation turned their limited attention span to games, to media, to creative and even laudable pursuits. But few continued to study mathematics, physics or the hum drum of writing the programming that drives our modern technology.
We elected a President who derided his opponents ability to speak fluent French, who followed Shakespeare by inventing words (nukular springs to mind) and who wasted the Nation's patrimony on a pointless war.
In Europe we found that the talented Blair foundered on hubris and also similarly bankrupted his economy. Now, amidst a recession caused by the greed so aptly depicted by Oliver Stone, we must ask the Chinese to buy our Bonds, rescue the supplier of London's water services and increasingly, along with the Indians, staff our Universities, Hospitals and Research Labs.
So, to those suggesting a response to the hard working, motivated and competent Asians threatening your lifestyle ..... get educated. Go to night school instead of watching the Simpsons. It's a tough world out there but it is one that looks very bright to the "exploited" factory workers in Korea, Vietnam, China, India and elsewhere.
21. tedkord (Posts: 7936; Member since: 17 Jun 2009)
You completely missed the point with that rambling rant. It had nothing to do with American education or motivation. So long as labor can be had for pennies per day overseas, and governments will allow companies to pollute and treat employees as slaves, companies like Apple will continue to outsource production there.
27. QWIKSTRIKE (Posts: 967; Member since: 09 Mar 2010)
This is and never was about education Strident. It's about cheap labor period. Manufacturing labor never ever was about having a college degree to push a button that operated a machine like a mindless drone. NAFTA is the reason for all of this. Also politicians and corporations that have sent American manufacturing to China, and Vietnam for cheap labor.
We make NAFTA agreements with communist nations like China,and Vietnam , and we then offer American manufacturing jobs which line the leaders of these nations with American capital. They then lend us money to fund rich corporate, and politicians wars and budget woes. Corporations have learned that if a leader of a corporation like "Meg Whitman" or "Mitt Romney" goes to congress, or if they elect a "business man" he will do to the American labor force what they have been doing ever since Walmart in the early 1970's discovered that cheap Chinese labor can produce very lucrative profits. As mentioned Apple has billions of dollars off shore in taxes that they owe. You or Apple may say that that's a lot of money. I will say as CNBC pointed out that its a 38% tax rate. We pay a 38% tax rate too so don't pity Apple for paying that amount because it's a sliding scale. The more you make the more you pay proportionately. They don't pity you for making less and feel sorry for you so don't dare pity them for paying their fair share 38% is good enough for us and should be good enough for them.
My problem is they talk about being American, but fail one American tradition....paying their 38% fair share of taxes like you, and I do. As Warren Buffet says they personally pay them selves in stock and only pay 15%, but they only pay it when they withdraw stock which can be forever. This is one of the reasons why there is a budget deficit. Since the 60's the rich have paid less and less in taxes ending the golden era as they called
18. -RVM- (Posts: 331; Member since: 19 Oct 2011)
Nokia still produce some of its phones in Finland (mostly high-end i guess), my N8 is made in Finland aswell. Apple just don't care about people (including american citizens) at all, they only care about profits.
19. tedkord (Posts: 7936; Member since: 17 Jun 2009)
Bullpuckey. It had nothing to do with the scratch resistance of the screen, it had to do with money. Not that Apple us any different than any other tech firm, they all outsource manufacturing to Asia, usually China, to pay workers pennies and to avoid environmental and worker rights regs.
26. nastynaps (Posts: 93; Member since: 16 Aug 2011)
Do I have to read this before I say that's why you ship s**t Steve!?
30. stealthd (Posts: 1067; Member since: 12 Jun 2011)
I like how everyone commenting here thinks they're an economics expert that knows better than the NYT all of a sudden. If you don't have an iPhone, that Android of Windows phone was still made oversees. But it's easier to blaim Apple than to blaim the company you've already given your business to.
40. QWIKSTRIKE (Posts: 967; Member since: 09 Mar 2010)
NYT doesn't have all the answers, and they are a news column printing mostly the opinion's of the writer. Too Big to Fail was made from a news columnist from the NYT, but then look at "The Inside Job", and you can see the NYT version was skewed towards the crooks that caused the dilemma.
I don't believe that anyone is saying other companies that are doing this are any better than Apple. In fact they are all included in the same category as Apple. The exclusion of other companies being focused on in this blog is that Apple is the company that this article is focusing on.
37. iDroidx650 (Posts: 72; Member since: 26 May 2010)
Cost of iPhone made in China: $650
Cost of iPhone made in USA: $1200
38. remixfa (Posts: 14255; Member since: 19 Dec 2008)
thats the cost after their 72% profit margin mark up and suggested retail pricing for resellers. The actual cost per set might be 100-200 higher.. so like 350 a set instead of the 150 a set it costs them now for parts and labor.
42. Numz (Posts: 34; Member since: 31 Oct 2009)
Based on this articlehttp://www.businessinsider.com
/you-simply-must-read-this-article-that-explains-why-apple-makes-iphones-in-china-and-why-the-us-is-screwed-2012-1it would cost apple $65 more to make the iPhone in America, something they could live without. It also said the real reason they’ve moved manufacturing to China is because of the supply chain and the nimbleness of the factories but it seems like they could move some of the jobs back to America, while keeping some still in China, still giving them the nimbleness of their factories there. Also if they split the manufacturing between 2 countries, it seem like they could also split the extra cost of manufacturing, so instead of $65 more for every iPhone sold it would be more like $20 - $30. Seems like these are the type of steps that would need to be made to get manufacturing back her, they are the same steps that sent the manufacturing to China to begin with.