Investors impressed by the new iPhone models; WSJ explains why the iPhone isn't made in the U.S.



Typically, the shares of Apple decline following its September new product event. That's because speculators usually drive up the price of the stock in anticipation of what the new iPhones might bring. Once the new handsets are unveiled, disappointment sets in and the speculators make a mad dash for the exit. It might not be a popular opinion, especially since there were a few rumored features missing from the announcements yesterday (chief among them reverse wireless charging), but the presentations apparently impressed investors. Instead of declining the day after the new product event, Apple's shares are actually up $5.71 or 2.64% to $222.42. Once again, Apple is valued at over $1 trillion.

Speaking of Wall Street, yesterday The Wall Street Journal released a video that explains why Apple just can't cave in to demands from President Donald Trump and build the iPhone in the U.S. Unless you've been avoiding the news over the last year, you know that the U.S. and China are engaged in a trade war. The Trump administration has imposed tariffs on a large number of goods imported from China and the latest tier of products, which are taxed at 15%, include devices like the Apple Watch and the AirPods.

On December 15th, 15% tariffs will be applied to smartphones imported from China including the iPhone. Apple can decide to eat all or some of the additional cost, and pass the balance on the consumers in the form of higher prices. The company already has decided to absorb the entire tax imposed on certain iPhone and iPad covers so that consumers are not affected. The tariffs could raise the retail price of the just-announced iPhone 11 Pro by $40 starting in December. If Apple passes the cost on to consumers, it would take the price of the device to $1,039 and up.

Trump has asked Apple to move production to the United States a number of times


Yes, Apple is an American company. But most of its products are designed in California and manufactured in China. And that brings us to the Journal's video. As it points out almost right from the beginning, Apple has recently tried to assemble a key product in the U.S. When Apple marketing chief Phil Schiller announced that the 2013 Mac Pro would be manufactured in the U.S., those attending the new products event cheered. The computer (with a design that the Journal likened to a garbage can) was built in a $100 million facility that the company built in Austin, Texas. But Apple had supply chain issues and was forced to move production back to China.


About a year ago, Trump told Apple that it can avoid tariffs by moving production of its devices, including the iPhone, to the U.S. That is easier said than done. Apple has a global supply chain that would be hard to replicate. Apple did say earlier this year that it is looking to move as much as 30% of its production out of China, and it already does manufacture some iPhones in India. However, the models produced in that country are mostly for domestic use to-ironically-save Apple from tariffs in India that would drive the price of each phone up by $100. While India is indeed the second-largest smartphone market in the world, it is a developing country and many consumers are unable to afford the price of a flagship phone. One country thought to be under consideration by Apple to replace some of the production done in China in Vietnam. Back in July, Apple announced that it would start trial production of the AirPods wireless Bluetooth earbuds in the country. The device is currently assembled in China.

Last month, Google announced that it was moving production of its Pixel handsets to Vietnam and out of China. But unlike Apple, Google manufacturers a small number of handsets (8 million to 10 million this year) making it easier for it to assemble a supply chain. Google is going to make its phones in a factory that used to churn out Nokia handsets back in the day.

Donald Trump isn't the only U.S. president that has tried to get Apple to move production to the states. The Journal notes that President Barack Obama once asked the late Steve Jobs what it would take to move iPhone assembly to the U.S. Jobs reportedly replied that "those jobs aren't coming back."

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21 Comments

1. darkkjedii

Posts: 31101; Member since: Feb 05, 2011

I would’ve loved to see trump try to punk Jobs. Stevie Steve wouldn’t stand for it.

3. tedkord

Posts: 17362; Member since: Jun 17, 2009

Jobs was more like Trump than unlike him.

5. jellmoo

Posts: 2597; Member since: Oct 31, 2011

But Jobs was competent...

12. darkkjedii

Posts: 31101; Member since: Feb 05, 2011

True, but trump couldn’t bully him.

2. Mike88

Posts: 415; Member since: Mar 05, 2019

After watching the launch event, I felt that even the launch event was “made in China”. Everyone was Chinese except Tcook. I don’t know the reason lol.

4. Mikele

Posts: 166; Member since: Nov 19, 2013

Chinese assembling company...Lol

9. TBomb

Posts: 1505; Member since: Dec 28, 2012

The game developers were Chinese I believe. One of the ladies on stage was also of Asian ethnicity.

10. Georgio

Posts: 254; Member since: Nov 21, 2016

But they all had american accent ; they were american citizens.

15. maherk

Posts: 6889; Member since: Feb 10, 2012

Your comment is awfully racist. You do realize that millions of Americans have Asian roots?

7. lyndon420

Posts: 6793; Member since: Jul 11, 2012

So instead of a decline in share value, it went up this time? Must be the new phone naming strategy because there was little else to get excited about...aside from maybe the new arcade service...

14. blingblingthing

Posts: 971; Member since: Oct 23, 2012

That's Apple innovation for you. Pro moniker , but the same old late adoption of features from Android.

17. mackan84

Posts: 479; Member since: Feb 13, 2014

Yes and it’s a working strategy. Let 10-20 OEMs fight out with different strategies and see what’s getting popular and useful. Remember the crazy ideas OEMs tried in the early days? Projectors, crazy keyboards etc. Fun time but not often well spent investments.

16. TS020

Posts: 44; Member since: Feb 16, 2019

Can't wait to get charged for games that were free on Kongregate 10 years ago!

8. toukale

Posts: 632; Member since: Jun 10, 2015

Every year, pundits on blogs, sites, forums, and tv after every Apple event come out and predict the doomed of Apple. Every year, they have been wrong. Here is the reality, pretty much every user have picked their platform of choice and 99% of them are not going to move. You do have a few million folks that do cross from one platform to the next every year. Those users are so minuscule it won't affect either platform owners. Anyone who says otherwise is simply wrong, or are driving some narrative, which is why you usually see those things on sites, forums, and network that make their money through advertising. It's simple, those folks need the drama, need something to drive the clicks for more advertising money.

11. scarface21173

Posts: 693; Member since: Aug 17, 2014

Yeah there doing so well, they had to drop the price of there best selling device. like it or lump it sales are down by millions.

18. mackan84

Posts: 479; Member since: Feb 13, 2014

The millions down ain’t buying androids they’re sticking to what they have. Besides the flagship-market isn’t upgrading as often anymore. As he says, these 1.4 billion iOS-users is staying put (for now). Apple lowered their best selling iPhones price to get them to upgrade from their iPhone 6-8. It doesn’t make sense that if users are going away and service-revenue is going up.

22. whatev

Posts: 2283; Member since: Oct 28, 2015

Exactly, basically they are playing with android fans minds, android fans are such a great mass to make money

13. gadgetpower

Posts: 208; Member since: Aug 23, 2019

I think, apple will be in line with their projected services revenue.

19. gadgetpower

Posts: 208; Member since: Aug 23, 2019

Only trolls are not impressed.

21. limporgyuk

Posts: 363; Member since: Nov 06, 2013

Anyone who knows anything about technology is not impressed.

* Some comments have been hidden, because they don't meet the discussions rules.

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