Apple CEO Tim Cook reveals what Apple needs to build iPhone in the US
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While the tariff fiasco has brought red ink to the markets and chaos to the global economy, the ultimate goal according to President Donald Trump and his supporters, is to have manufacturing brought back to the United States. According to Trump’s Commerce Secretary Howard Lutnick, who was appearing on CNBC, Apple CEO Tim Cook told him that there is a “key catalyst” that would be necessary for Apple to consider building the iPhone in the US.
Lutnick says that he asked Cook when he was going to bring iPhone manufacturing to the States. Cook responded by saying, “I need to have the robotic arms to do it at a scale and precision that would allow me to bring it here.” Cook seems to be one of the few tech industry leaders who might not be a Trump supporter but who still commands respect from the president and vice versa.
This relationship has helped Apple protect its most important product, the iPhone, from tariffs during both Trump terms. Recently, Trump temporarily exempted some consumer electronics including smartphones from the reciprocal tariffs that Trump imposed on US trading partners. This includes a whopping 145% tariff on products imported to the US from China which is where the majority of iPhone units are assembled.
“They’re not going to be the ones screwing components in.”
By using robots to do the tedious low-paying assembly jobs such as building an iPhone, Apple wouldn’t have to worry about finding Americans willing to work for the $3 to $3.70 per hour that iPhone assemblers reportedly make in Shenzhen, China. Without a robotic labor force, at the federal minimum wage of $7.25 per hour, Apple would be paying twice that amount to build the iPhone forcing it to raise the price of the device.
By using robots to build the iPhone in the US, Apple would be able to reduce the cost to assemble the product and might even be able to cut prices for the iPhone. But Apple is still a long way from having a team of robots unplug themselves in the morning and head over to the assembly line where they silently build iPhone units. Yet, if you ask the Commerce Secretary, he’ll try to get you to believe that this technology is coming sooner than you’d think.
Talking about the iPhone, Lutnick says about Tim Cook, “He wants to build it here, he’s going to build it here. The Commerce Secretary does agree with our position that Americans won’t work for the low wages Foxconn pays iPhone assemblers in China. He says that Americans will be running the iPhone factories in the States. “They’re not going to be the ones screwing components in.” Unfortunately, Lutnick doesn’t explain who will be.
Cook is right and robotics can be the answer, but this is going to take time even with AI. Let me make a statement that many of you will find surprising. If the Trump administration is patient and allows time for the technology to catch up with the goal, the current administration might end up being known for helping change the world of manufacturing for the better. However, patience is not the strong suit of our president and his team.
Questions & Answers
Q.What is the primary condition Apple's CEO stated for considering iPhone manufacturing in the US?
What is the primary condition Apple's CEO stated for considering iPhone manufacturing in the US?
Tim Cook stated that Apple would need robotic arms capable of manufacturing at a scale and precision that would make US production feasible. This technology is currently not available at the required level.
Q.How would using robots for iPhone assembly in the US potentially impact production costs and device prices?
How would using robots for iPhone assembly in the US potentially impact production costs and device prices?
Robots would eliminate the need to pay American workers federal minimum wage for low-paying assembly jobs, which would otherwise double labour costs compared to China. This could reduce assembly costs and potentially lower iPhone prices.
Q.What is the current hourly wage for iPhone assemblers in Shenzhen, China?
What is the current hourly wage for iPhone assemblers in Shenzhen, China?
iPhone assemblers in Shenzhen, China reportedly earn between $3 and $3.70 per hour. This is significantly lower than the US federal minimum wage of $7.25 per hour.
Q.What role does the Commerce Secretary believe Americans would have in future US iPhone factories?
What role does the Commerce Secretary believe Americans would have in future US iPhone factories?
The Commerce Secretary believes Americans would be running the iPhone factories rather than performing the manual assembly tasks, as they would not work for the low wages paid in China.
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