Steve Jobs' desire for scratch-resistant glass is why the Apple iPhone is not Made in America

Steve Jobs' desire for scratch-resistant glass is why the Apple iPhone is not Made in America
Why isn't a product so identified with an American company like Apple (American as Apple pie?) made in the U.S.A.? Last February, when President Barack Obama attended a dinner with Silicon Valley stars, each guest was to ask a question to the President. But just as Steve Jobs was about to ask his query, the President had one of his own, "What would it take to make iPhones in the United States? Why can't that work come home?" Jobs simply replied, "Those jobs aren't coming back." The dialogue came from the recollections of a dinner guest, but reveals how Apple has been relying on overseas factories to produce the iconic touchscreen smartphone.

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



42. Numz

Posts: 34; Member since: Oct 31, 2009

Based on this article it 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.

37. iDroidx650

Posts: 83; Member since: May 26, 2010

Cost of iPhone made in China: $650 Cost of iPhone made in USA: $1200

38. remixfa

Posts: 14605; Member since: Dec 19, 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.

30. stealthd unregistered

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.


Posts: 1461; Member since: Mar 09, 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.

26. nastynaps

Posts: 93; Member since: Aug 16, 2011

Do I have to read this before I say that's why you ship s**t Steve!?

24. taz89

Posts: 2014; Member since: May 03, 2011

yep sure its got nothing to do with money.

19. tedkord

Posts: 17532; Member since: Jun 17, 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.

18. -RVM-

Posts: 331; Member since: Oct 19, 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.

17. strident

Posts: 2; Member since: Jan 22, 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: 17532; Member since: Jun 17, 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.


Posts: 1461; Member since: Mar 09, 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

16. Eingild

Posts: 203; Member since: Apr 19, 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.

15. Owlet

Posts: 450; Member since: Feb 21, 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: Jan 22, 2012

Yeh, Jobs have to be come back from the grave, hahaha


Posts: 1461; Member since: Mar 09, 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: 3165; Member since: Jun 19, 2010

no, they'll just find some other heavily populated poor country to move their manufacturing to.

14. digicon

Posts: 121; Member since: Aug 11, 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: Jul 19, 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.

13. vijaysivakula

Posts: 229; Member since: Aug 17, 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.

11. Bluesky02

Posts: 1439; Member since: Dec 05, 2011

The simple answer is Asian slave laboring is cheap thats it.

10. belovedson

Posts: 1061; Member since: Nov 30, 2010

didnt phonearena do an article about how apple is holding billions overseas to avoid taxes

9. TKFox007

Posts: 303; Member since: Nov 02, 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.

7. Whateverman

Posts: 3295; Member since: May 17, 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'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: Oct 23, 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: 2478; Member since: May 06, 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: Jan 22, 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: Oct 29, 2011

Genuine question, no sarcasm: what phone do you buy when you need one?

6. StephenJobs

Posts: 2; Member since: Jan 22, 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.....

20. quakan

Posts: 1419; Member since: Mar 02, 2011


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