Why Aren’t Apple Products Made in America?
As recently as 2002, most of Apple’s products were manufactured in the USA. What happened? Why is nearly everything, from Macs to iPhones, made in China now? The New York Times provides an in depth report on Apple’s move overseas, and it’s not as simple as you might think.
It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products.
If you enjoyed the “Mr Daisey and the Apple Factory” podcast, you’ll probably enjoy reading this too, as it sheds some light on the business decisions driving factories like Foxconn. Here’s an example on the challenge Apple faced when hiring skilled engineers in the USA vs China:
Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones. The company’s analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States. In China, it took 15 days.
The lengthy read also includes several anecdotes about Steve Jobs and Tim Cook, as well as plenty of quotes from other unspecified current and former Apple executives. If you’re interested in Apple and Apple history, don’t miss it.
Easy…. Taxes and regulations. Steve even said so in his biography.
Our government is our own worst enemy.
Someone didn’t read the article. Pull your head out of your politics for 2 minutes and learn something new.
Nothing to do with taxes or regulation, everything to do with the business and skilled labor, plus the fact that the Chinese government is subsidizing the building of factories. But if you read the article you’d know that.
Taxes and regulations have everything to do with manufacturing going to other countries. Try to start up a new business in California and you’ll find out how much it costs just to own a 2 person operation. I’ve been in the manufacturing business for over 30 years and have seen the changes and all the hoops they have to go through just to sell a product.
I agree with Susan. Labor? Are you kidding me? Labor can be found anywhere, the US has plenty of diligent workers just ask GMC. Problem is uncle sam has 2 hands in the cookie jar. Research how to start and maintain a big or small business. This ain’t the entrepreneur friendly US grandma and grandpa built. and for most of you it would be great grandpa and great grandma.
Skilled labor… Are you kidding me. There is an extremely small percentage of skilled people that Apple relies on in China and all the rest are low paid general labor workers. You want to know why everybody is manufacturing in China – its cheap. It’s that simple… Ask ANY investor if a company would be more competitive producing goods in the US or China. Unions and regulations drove up the cost of producing anything in the US.
THANK YOU!!! It’s BS to say the issue is the lack of skilled labor when the VAST majority of those working in those factories are UNSKILLED assembly line workers. It’s cheaper: PERIOD. Apple could care less about doing business in the states, not because of the tax code where they effectively pay a lower rate than EVER before, but because they can sidestep the employment regulations we have here against labor violations and minimum wage. It’s a DISGUSTING evil company and I refuse to purchase any of its products because it’s yet another company who will screw over Americans in its pursuit of endless profit.
to say that apple moved over seas only because they were able to find more skilled workers in china as opposed to here in the US to over see 200 000 workers… its BS. they could have kept their factory here and imported the talent they say they needed, the only difference is.. here in the US you can not pay someone 1 dollar an hour to put your ipad together, while in china you can. include logistic costs and you are still way ahead… my question is.. why am i paying 1800 dollars for my mac when it was built for much, much less. where is the value in that.. for a product to cost as much as it does, i would assume that it should be made here in the USA. i love my mac, but i am willing to give up my mac for a company that would make a product here in the USA… buying american and demanding american is the only way we can help this country. we can not continue to turn our backs on our own people for cheaper products.
Becomes funny after seeing this garbage
http://9to5mac.com/2012/01/20/republican-presidential-candidates-ponder-on-apple-outsourcing-gadget-making-to-china/
it’s not made in america, just like anything else, because it would sell 2 to 3 times the actual price
Actually the iPhone would cost just about 60$ more if it’s made in usa.
I think it’s more about this:
“We shouldn’t be criticized for using Chinese workers,” a current Apple executive said. “The U.S. has stopped producing people with the skills we need.”
Read the whole article at the NewYork Times, really interesting!
we product iPhone but let US sale it, the profit is none of our business.
Reads to be as Tim Cooks decision, granted how Steve was quite fanciful about his factories.
It is because in China you can ask to 12 y.o. chindren to work 15 hours a day and 7 day a week for (almost) free…
Sorry, that’s western propaganda! Have you ever been in China? I was there many times.
USA has the same problem like Germany and other western countries. They do not enough for education! They waste money for their army! Put ONE per cent from the American military budget in their education sector and you will get many very good qualified workers!
In USA(and other western countries) wars bings more profit than education … that’s the real reason!
Don’t be sorry, please don’t be sorry!
USA and other western countries are not the same…
And they have absolutely not the same problems, except some problems from USA origin that unfortunately Europe has to share and suffer now.
USA is just a Tiger of Paper that continues to exist just by destabilizing continuously the rest of the world and fighting everything it is afraid by… But the end is always closer…
About education you cannot compare USA (30% of illiterate people) with Germany France or Italy (1 % of illiterate people – most of them from foreign origin)
有些白痴总是把组装于China意淫成制造于China
The average education level in America is low, it’s been proven! Also we’ve been taught to look down on these kinds of jobs as menial and below us. Also the same people complaining about the lack of jobs here are the same ones who would bitch if they had to work in a factory.
It always amuses me when the free-market right congratulate communist China to show how capitalism should be run. That is, sans democracy and representation – perhaps even the rule of law (regulation).
The internet was invented from an encounter between counter-cultural idealism and technological experimentation. It wouldn’t have come out of China, which is less individualistic and still scared of what the net could do for ‘harmony’ in society. But if you want to run industry like China, the US would have to become less individualistic, less free and have many more state run banks and enterprises that currently gives China such a grip on its economy. In the end, it’s got a massive population which is generating a dizzying number of engineers and educated people unencumbered by the costs that bog down education in the west.
The question for Apple is more long term – if it reduces the demand for engineers and skilled people at home and don’t make the investment in the US, the more dependent on foreign workers it will become. Where will the free thinking innovators they apparently identify with come from?
In China there’s less distinction between state and private interests – in the end they’ll protect China first. What of Apple and the US?
You can significantly cut lead times when you dont’ take any concern for workers health and safety into account.
Taxes, regulations, and higher wages are the biggest problem. And of course, slipping bribes to the right people doesn’t always work here. Usually it does, but it was probably just too much trouble for Apple.
Imagine if Microsoft and Google do not license their work?
With whom Apple would directly compete with?
Apple competes not with Google and Microsoft, not directly, but with Microsoft and Google´s partners.
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really, who gives a toss? i want to pay the cheapest possible price for my products. if that involves making them in china, mongolia or Uzbekistan then so be it.
it’s the cost that the consumer cares about; not this crap you’re all discussing.
agreed.
What if your products are made by children? How about indentured servants? Slaves? I mean, who would give “a toss” about that?
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But would you pay twice as much if it had the ‘Made in the U.S.A.’ label on it? No you wouldn’t, so stop complaining.
I would, so stop assuming. Many people of means would. But it would not be sold as much and be more of a premium product which is fine. I would rather pay 1800 for an IPAD and know it was made in the USA and that it provided AMERICAN jobs than 920 (which I did for my son’s) and to know it was NOT helping my country. In fact, I wish I had known about this sooner as I would NOT have bought my son an iphone 4 or his Ipad. I hate this company now!!!! I am a BIG believer in buying American and thought Jobs would have kept that going.
Instead of changing NAFTA, the US should insist that all products imported into the USA, be produced in factories that meet the same strict EPA guidelines US factories do. China creates more pollution than the entire North American Hemisphere, Mexico (which says alot), Central America, South America. It is staggering how much factories in China are destroying our planet and contaminating natural resources.
Child labor is cheap, yes Apple insist they perform checks on factory conditions. Unfortunately not all the factories are checked. Not all the parts of an apple products are produced in “House”.
Apple doesn’t care about working conditions, they care about the bottom line.
Apple cares, they are not paying US minimal wage, but 25cents a day for foreign labor.
It is a pitty that such a great company, can’t do more to insist on factory conditions.
The reason why Apple is manufacturing abroad is purely economic. Apple, like all other companies, rationalizes cheap labor for high profit margins. And yes, the Chinese will work for cheap.
Slaves for a 12 hours working day are cheaper in China.
I am moving my company back to the US and setting up operations in Hawaii because of tax incentives (State & Federal). It involves RD&D and manufacturing, use of a free trade zone (Hawaii is one) and global shipping. I researched for four years where would be best for my company and found Hawaii to better than the mainland. I plan on employing 2500 people – professional, engineering, trades and administration. Funny thing is that it is difficult finding the skilled engineers and trades people that I need – even if I search on the mainland.
I considered at one time moving the company to Switzerland because of the incentives there and the high amount of skilled labour but in the long run, I wanted to create more jobs in the US.
We shall see. I am hoping that this year I will be able to find the people I need. I do not want to outsource my operations overseas (out side the US) any more. To many headaches – mostly cultural – and I am in Australia. Imagine what it would be like in Asia.
I understand Apple’s decisions but I feel that the real reason is that there is no support to bring the jobs back to the US by State and Federal Gvts. Remember, the first Jeep factory in China was negotiated by one of the Bush clan. The whole purpose of bringing China into Most Favoured Nation status was to utilise the enormous labour pool. Also, 50% of all of the world’s consumer goods are produced in China.
Those of us wanting to buck the trend are not getting all of the support that is really necessary. I had to find $50,000,000 on my own before I could get anyone really interested. Did it without an IPO. Want to stay private for as long as possible.
Enough rambling. All the best. Cheers.
A couple of points. First, if the U.S. is so ill suited for manufacturing, why do we still have more than 11 million people in the manufacturing sector? Second, if Apple states that it needs to be in China because it needs all the inputs for the iPhone and iPad to be close at hand, why are 95% of the parts that are in an iPhone and iPad manufactured in nations other than China? iPhones and iPads are not “manufactured in China”, they are assembled in China with parts manufactured elsewhere. That is why Foxconn can move a large share of its iPad production to Brazil; iPads can be assembled almost anywhere. iPhones and iPads could be assembled in this country by electronics assemblers making over $13.00 an hour. Of course to keep the price of the iPad the same, Apple would need to cut its margin from 55% to 38%. If you are interested in this question, please visit my blog at simply-american.net and find the article “Comparing Apples to Apples.” Tim Worstall of Forbes.com wrote a piece on that post that is also interesting to read; you can find it at http://www.forbes.com/sites/timworstall/2011/12/18/if-apple-onshored-ipa…. If Apple wants to assemble iPads in China and Brazil so it can make more money, so be it. But they should be honest about their reason for locating their facilities in those countries.
LOL DONT COME TO AUSTRALIA!!! LABOUR IS SOOO EXPENSIVE!!!If they took away minimum wage away we would have a better australia
It’s not just cost of labour though is it. Look at the case of Germany. Higher wages and strong unions and yet a likewise strong economy based on high tech engineering exports. What accounts for this is a highly skilled workforce but also companies that plan, invest and innovate for the long term. They also have a raft of middle sized companies that just make specific components of the larger items they also manufacture in the country. As a result, there’s already an existing network of suppliers companies can draw on. To me, it sounds like the networks (financial and cultural) required to create a manufacturing economy in the US have broken down. It’s a long game, not there for a quick buck. You can’t make this happen if you’re looking to create value from asset stripping. An economy based on consumption alone can’t be sustained long term. Without an industrial base, the US will no longer be a super power.
It isn’t unions per se that is the problem. Labor in other countries is being paid for pennies on the dollar compared to American workers. That’s not a union issue. Americans don’t want to work for chump change.
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