Trump's dream of a US-made iPhone clashes with Apple's manufacturing reality

[airbornex]

So the plan is to replace a hyper-optimized global supply chain with vibes and patriotism? Can’t wait for the $2,300 FreedomPhone assembled by four guys in Houston who just learned what a torque screwdriver is.

 

[takaozo]

Why even invest into the manufacturing when the tariffs can be lifted at anytime and now you are stuck with non-competitive manufacturing facilities. Not only does trump's ignorance have no limits but so do his cult like followers.

Politics it's not my thing, and I do not "follow" anybody. I was just being sarcastic and stated that the current situation is not that simple to overcome. More than that I'm not an US resident and never aspired to be one.

As for the iPhone price the $1200 USD + new TAX(104%) = $2450

 

[dirtyferret]

Politics it's not my thing, and I do not "follow" anybody. I was just being sarcastic and stated that the current situation is not that simple to overcome. More than that I'm not an US resident and never aspired to be one.

As for the iPhone price the $1200 USD + new TAX(104%) = $2450

I get that and I was not going after you. I was stating on top of your comment of how difficult it is to create an all domestic supply chain to feed domestic manufacturing; the fact is most companies have no desire to create one even with the tariffs in place because of the volatility they have.

 

[dirtyferret]

As for the iPhone price the $1200 USD + new TAX(104%) = $2450

Also quick FYI, tariff is on the unit price (cost of good) not the MSRP price. So if your commercial invoice states $100 for unit price the 104% tariff would be $104 even if the MSRP is $350 or more. So a 1k phone with a cost around $500 to manufacture would see around $520 and that is 100% being passed onto the consumer.

 

[m4a4]

As for the iPhone price the $1200 USD + new TAX(104%) = $2450

I've seen this ignorance quite a bit. Only the import (device) is tariffed, not the final sticker price the consumer sees lol

So, import an iPhone for $600 USD (for the sake of the argument, using the higher end of what's estimated here) + logistics and transport + Apple's markup (so they can make a profit) = $1200. $600 for other costs not tariffed.

Now they will import an iPhone for $1224USD + $600 other costs = $1824.
But that's assuming the higher markup doesn't change to add or absorb some cost. And assuming that the manufacturer doesn't eat some of the cost too.

A far cry from the hysterics I've seen everywhere.
And keep in mind that's with a 104% tariff. Imagine all the whining and bad math with the 10% and 25% tariffs when they don't actually change the end price as much as the bad math is lying about....

 

[takaozo]

I've seen this ignorance quite a bit. Only the import (device) is tariffed, not the final sticker price the consumer sees lol

So, import an iPhone for $600 USD (for the sake of the argument, using the higher end of what's estimated here) + logistics and transport + Apple's markup (so they can make a profit) = $1200. $600 for other costs not tariffed.

Now they will import an iPhone for $1224USD + $600 other costs = $1824.
But that's assuming the higher markup doesn't change to add or absorb some cost. And assuming that the manufacturer doesn't eat some of the cost too.

A far cry from the hysterics I've seen everywhere.
And keep in mind that's with a 104% tariff. Imagine all the whining and bad math with the 10% and 25% tariffs when they don't actually change the end price as much as the bad math is lying about....

Lets say one shop decides to sell a phone from a China factory in US.
The shop takes a batch of 10000 pieces. His price at factory is $400/piece.
For this price/piece it will be import taxed 25%, this means his acquisition cost is $500.
On top of that the importer applies his margin, lets say 10%.
Shelf prices is $550 and on that you add the local sales tax, let's say New York.
NY has a sales tax of 8.875%, this translates to a full prices of $598.81

Same calculus applies all over the world, only difference is the value of local taxes.

 

[dirtyferret]

Lets say one shop decides to sell a phone from a China factory in US.
The shop takes a batch of 10000 pieces. His price at factory is $400/piece.
For this price/piece it will be import taxed 25%, this means his acquisition cost is $500.
On top of that the importer applies his margin, lets say 10%.
Shelf prices is $550 and on that you add the local sales tax, let's say New York.
NY has a sales tax of 8.875%, this translates to a full prices of $598.81

Same calculus applies all over the world, only difference is the value of local taxes.

That margin would be very low and probably not worth it for the seller. I can give you a more difficult example. We import something from China for $4 and sell it for $20 on Amazon. So without current tariffs, FOB to Amazon would be around $6 (just under but close enough). Amazon's take on small electronics @ $20 is about $8 all in for FBA. So that's just $6 net and doesn't include returns, ad dollars/sponshorship on amazon, and units damaged in the warehouse and any other over head you may have. Sales tax is paid by the consumer and Amazon collects that. That's why when you double the products cost due to tariffs, you will kill small business that relies on large online vendor web sites for sales. It's so simple even the fox news morning show understood the tarrifs were stupid (although no clue why one of them beleives the customer pays half).

On a $400 unit price item (like an Apple watch Ultra) for $800 to the customer, the Amazon take would be around $70 all in for FBA.

 

[VitalyT]

Boy, I'm glad I got iPhone 16 Pro Max 2 month ago. The supply of those appears to be gone now.

 

[maxxcool7421]

I-people buy them already for 1200-1600$ a unit ... they will happily pay 2300$. What will make me laugh is when the FABS cannot produce any SOC's, gpus or cpus because china cuts the US off from their silicon supply and all these high priced US fabs go completely idle ...

We REQUIRE China for cpu grade silicon and RUSSIA/Ukraine for manufacturing NEON gas for cpus and gpu and other silicon based processors ... so even if we spend trillion $ on fabs and tariff's .. we STILL have to ask china 'permission' to make those same cpus, gpus, processors, memory, solid state disks now being made out of country. And NO .. the US does NOT have the grade of silicon in it's borders to become ''independent'' .. and NO we require Russia's and ukraines neon gas ... oh and russia WILL get that neon production in any deal trump cuts with putin to ''end the war''

See articles below:

hackaday article
Google > "mining-and-refining-pure-silicon-and-the-incredible-effort-it-takes-to-get-there"


statista website
Google > "silicon production by country statista"


arstechnica website
Google > "low-on-gas-ukraine-invasion-chokes-supply-of-neon-needed-for-chipmaking"


GOOGLE > "U.S. Remains Painfully Dependent on China for Silicon and Solar Panels" for OILPRICE dot COM WEBSITE ARTICLE
Alternative-Energy/Renewable-Energy/US-Remains-Painfully-Dependent-on-China-for-Silicon-and-Solar-Panels

So pucker up and repeat after me "China?? can I have some silicon to make cpus please??"

 

[Megalomaniac]

Apple knows that crossing the $2000 barrier is a non starter. That's why they spent so much time developing cheaper iPhones instead of going towards folding iPhones and other gimmicks.

I personally would consider spending $2000 on my iPhone 17, but ONLY if they have 2TB storage.

Somehow, however, I think Apple will get it to me under $1800.

 

[manowar51]

UK media are reporting the iPhone will rise here too, but nobody explains why.

The tariffs only apply to items imported into the USA, so am I to conclude if they rise here too in the UK by roughly the same, it's nothing more than "any excuse" at this point to cream off extra profit?

The UK has a 20% sales tax on all goods and services called VAT. Its like a tariff but its own population pays it instead.

If true, this is truly depressing.

Its depressing that corporations won't be able to take advantage of low slave wages in China to deliver cheaper luxury electronics. How is it depressing? You want this situation to continue? You only care about the price you pay, and you have no human compassion?

 

[KingKappa]

People are not even considering the environmental and health implications these plans for "100% US-built" have.

Who would want a factory polluting in their backyard? No really?

Ah yes great a 2300USD iPhone that comes with an increased risk of all sorts of cancers.

 

[Athlonite69]

Apple's manufacturing reality

Meaning they're not allowed to employ children or have slave labour hours and pay

 

[ZedRM]

If anyone want's proof the Trump has a few screws loose(not that Harris would have been any better), look no further. American made iPhone/iPad is a pipe dream..

 

[BogdanR]

As noted by 440Media, the idea of a US-made iPhone is "pure fantasy."

Well, US (companies) succesfully made what was a backward and undeveloped China into giant and advance electronic manufacturing ecosystem. Period.

Yes. And it only took what…30 years to do it?
And that was done in a country in which when the Party tells you to jump you either jump or ask “how high” before jumping.

Good luck doing all that in a country which never fails to shove the 2nd Amendment in the faces of everyone.

 

[tragicallyhip]

Much ado about nothing, it takes 'billions' and 'years' to re-shore manufacturing back,one more thing Apple and everyone else knows that Trump hasn't figured out yet...*he will be gone and his tariffs with him* long before a dime is spent, a shovel dug or a ribbon cut. Trump says Trillions are coming back, no they are not!, what he has is a hand full with promises, specious commitments and a bushel full of *letters of intent*

 

[BogdanR]

The UK has a 20% sales tax on all goods and services called VAT. Its like a tariff but its own population pays

The US has now a minimum of 10% import tax called Trump Tariffs. It is like VAT. Exactly like VAT except it is not written separately on the posted price so magats can be fooled.

You guys threw some tea into the Boston Harbour at some point, just to make a point over taxes imposed by a tyrant… However now you seem think French Roast Coffee is actually French so I don’t have much hope for you anymore.

 

[onebignerd]

Trump is stuck in a bygone era. While bringing more manufacturing back to the U.S is a great idea, the reality is that few Americans are willing to take such jobs, nor is there is the supply of tech and science graduates to fill these positions. The ridiculous requirement for a degree to work warehouse, inventory, janitor and other unskilled jobs is baffling. I have experience in these jobs and am now unqualified to even apply!

 

[Mtyson8]

As for the iPhone price the $1200 USD + new TAX(104%) = $2450

Your math is using 204% total.

 

[robert40]

Trump's ignorance has no limits.
What can we expect from a convicted criminal that has crashed his own businesses into bankruptcy.

If the previous government hadn't been such a useless, these people wouldn't have come to power, you're very smart.

 

[takaozo]

Your math is using 204% total.

for you to check my math

Percentage Calculator

percentagecalculator.net

What is the percentage increase/decrease
from 1200 to 2450 = 104.1666
Because I rounded up from 2448

 

[The Talking Tech]

If the previous government hadn't been such a useless, these people wouldn't have come to power, you're very smart.

If the American people wouldn't be so ignorant with their voting decisions they should have been able to see the Trump's lies a mile ahead...but American voters only care to divide themselves instead of being United as the name of the country implies.

 

[monkeylove]

So the plan is to replace a hyper-optimized global supply chain with vibes and patriotism? Can’t wait for the $2,300 FreedomPhone assembled by four guys in Houston who just learned what a torque screwdriver is.

I think the plan is to come up with reciprocal tariffs and then expect negotiations, which is what happened with many.

Behind that is that system you described backed by an underlying one, where the U.S. is expected to take on increasing levels of debt to cover increasing levels of spending while facing increasing levels of trade deficits even as the rest try to move away from the dollar.

Can that go on indefinitely?

 

[monkeylove]

Also quick FYI, tariff is on the unit price (cost of good) not the MSRP price. So if your commercial invoice states $100 for unit price the 104% tariff would be $104 even if the MSRP is $350 or more. So a 1k phone with a cost around $500 to manufacture would see around $520 and that is 100% being passed onto the consumer.

Exactly. Many also don't know that many products have very high margins, such that consumers may pay as high for the product as for marketing it.

For example, it only costs a few dollars to make a pair of expensive sports shoes, but more go to admin and overhead, and even more to "research", with the largest component (sometimes, up to half) goes to marketing.

Meanwhile, the companies that sell them not only produce healthy profits (and even against their own workers, as the latter receive a much smaller portion in exchange for increasing productivity) but even they are overvalued: their stock values are way above what they earn.

Not only that, but markets are both rigged and driven by speculation, which is why stock and even oil markets are swinging wildly.

 

[monkeylove]

China is an authoritarian state. It has its advantages as they're able to 'get stuff done' without opposition. The US is quickly becoming China 2.0. Trump is the dictator in all but name....and he loves it.

One Chinese expert was once asked in the documentary, The Coming War on China, to state briefly the difference between China and the U.S.

He said that China is ruled by the Communist Party while the U.S. is ruled by Wall Street.

Even more interesting is one article about Harvard professors doing face-to-face and detailed surveys in China some years back. They found out that most Chinese aren't Communists or members of the Party and are only interested in doing business. They also said that they voted for the Party only because its policies work, I.e., a combination of coordination between public and private sectors plus the use of export zones, leading to industrialization and decades of substantial growth which lifted over 800 million of its people out of poverty.