Wednesday, February 1, 2012

Where Is The iPhone Really Made?

Tim Cook the CEO of Apple has been under fire lately about the company’s “made in China” gadgets.  With one of its biggest manufactures, Foxconn  (world's-largest maker of electronic components), coming to terms with worker suicide owed to demanding work environment, but numerous have wondered why these trendy items can’t be produced here locally. 
In reality, the majority of the iPhone is made in the states. 

A report composed by three U.S. professors showed that merely “$10 or fewer in direct labor wages goes into an iPhone or iPad is paid to over seas workers.”

The report points out that while the Apple goods – as well as components- are manufactured in China, the main benefits go to the U.S. economy  because Apple continues to keep most if its product design, software development, product management, marketing and additional high-salary jobs here locally and not overseas.

China’s main purpose is to put the items together. 
China Daily put it on all the table in an article on Tuesday, stating that before China receives anything, the phones start out in the U.S. with Apple engineers, and then is sourced with components from different parts of the world, mainly southeast Asia, and assembled at Foxconn.

Jason Dedrick, a professor at Syracuse University, said that China’s trade balance with the U.S. is marginally affected by Apple. That’s because most of the value in is captured by the brand itself, distributors and the retailers, not the manufacturers.

According to China Daily, citing the report, each item sold in the U.S. for about $600 adds between $229 and $275 to the U.S.-China trade deficit per unit sold. Kenneth Kraemer, a professor from the University of California, said that most consumers don’t understand how Apple’s global supply chain works. “They focus only on the trade deficit with China, and therefore they think China has a bigger role. What they don’t understand is that China gets all sorts of input from other countries from Japan, the U.S., Malaysia and so on. China’s contribution is really a small amount of labor,” Kraemer was quoted as saying in the paper.

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