Apple is considering moving iPhone production to the United States, according to a report released Friday by Nikkei Asian Review.
“Apple asked both Foxconn and Pegatron, the two iPhone assemblers, in June to look into making iPhones in the U.S.,” Nikkei reports. Foxconn agreed to the request, but Pegatron “declined to formulate such a plan due to cost concerns.”
Cost is a real concern, and not just for Pegatron. If Apple were to move operations to the United States, it would face much higher costs of doing business than it currently does in Asia.
It currently costs around $225 for Apple to make a 32GB iPhone 7, and the firm sells the phone for $649.
The impetus for Apple to move production domestically could very well be victory of President-elect Donald Trump. At a speech at Liberty University in January, Donald Trump said: “We’re going to get Apple to build their damn computers and things in this country instead of in other countries.”
While promoting his book, “Crippled America,” in 2015, Trump described his views of Apple outsourcing labor and production to China. “China makes more money with Apple than we do, if you think about it. We have to bring Apple — and other companies like Apple — back to the United States. We have to do it,” Trump replied.
He also said that bringing American companies back to the United States was one of his “real dreams for this country.”
Another potential reason that Apple is looking to America is its recent annual report. Apple, the most valuable company on Earth, reported its first revenue decline in 15 years in October, and suffered heavily in the Chinese market. (RELATED: Apple Experienced First Revenue Decline In 15 Years)
The company reported a quarterly revenue of $46.9 billion and quarterly net income of $9 billion, or $1.67 per diluted share, Tuesday. Apple, in the same quarter of 2015, had a revenue of $51.5 billion and net income of $11.1 billion, or $1.96 per diluted share. That is a 9 percent drop in revenue in just one year.
Apple’s fantastic year in 2015 was largely due to exponential growth in the Chinese market. This year, however, the company has not been able to keep up the pace in China, and as a result Apple incurred a 30 percent revenue loss in the nation in 2016.
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