Apple has started exploring possibilities of manufacturing its marquee product, iPhones in the United States. Apple has reportedly asked its major suppliers to look into local manufacturing as an option.
The Nikkei Asian Review reports that Apple has Foxconn and Pegatron to study the opportunities for manufacturing in India. "Apple asked both Foxconn and Pegatron, the two iPhone assemblers, in June to look into making iPhones in the US," a source said. "Foxconn complied, while Pegatron declined to formulate such a plan due to cost concerns."
The biggest hurdle in the shift in manufacturing from China to US is the rise in production costs. Foxconn and Pegatron assemble more than 200 million iPhones every year from their campuses in China. While Foxconn is studying the scope for US manufacturing, its Chairman Terry Gou is less enthusiastic about the plan.
"The idea of making iPhones in the US is seen to more than double the cost," notes Nikkei Asian Review.
The new US Presidential-elect Donald Trump had announced that he will force to shift production to the United States. During his build up to the Presidential race, he asked supporters to boycott Apple products in the light of FBI vs Apple encryption battle. It is believed that Trump will push Apple to shift its production once he takes over White House in January, 2017.
It costs about $225 for Apple to make an iPhone 7 with 32GB memory, says IHS Markit. Apple sells the product unsubsidised for $649, bringing the margin close to $424 on every iPhone sold. Apple, Foxconn and Pegatron declined to comment to Nikkei Asian Review but an iPhone with 'Designed and Assembled by Apple in California' may happen soon.