This discussion reminds me of the following from the late David S. Landes, professor of economics and of history at Harvard:
“How much more vexing are the sassy dismissals that tell the public to rejoice at the prospect of cheaper cars and TV sets, which they can no longer afford, and advise them to seek jobs growing soy beans or servicing bank accounts. This, remember, is a replay of the advice John Bowring gave the member states of the German Zollverein in 1840: grow wheat, and sell it to buy British manufacturers. This was a sublime example of economic good sense; but Germany would have been the poorer for it. Today’s comparative advantage, we have seen, may not be tomorrow’s.”
David S. Landes, The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor (New York: W. W. Norton & Company, 1998), 521.
Lol @ the notion of the USA lacking "skilled labor" when they were hiring children off the street for a long time.
I Smell fear. How dare the USA bring back a product economy that benefits its people!
by "skilled labour" I'm sure they mean cheap labour. The next sentence backed that up with "...and the eager workforce in place.". The poor chinese will work (as they have no other option) and work for their futures as they know they can be replaced instantly. Many young americans, as is the case in most western countries, don't have the same drive to work hard. Benefits/handouts and entitlement culture has a lot to do with it.
Lol @ the notion of the USA lacking "skilled labor" when they were hiring children off the street for a long time.
I Smell fear. How dare the USA bring back a product economy that benefits its people!
To be exact, skilled labor willing to accept minimum pay. Also, it is a little hard for a fifty years old to assemble all the small parts in an iPhone, which can be easily accomplished by a 18 years old.
Accelerometer: Bosch in Germany. Invensense in the United States.
Audio Chipsets and Codec: Cirrus Logic in the United States (outsourced for manufacturing). :
Baseband processor: Qualcomm in the United States (outsourced for manufacturing).
Batteries: Samsung in South Korea. Huizhou Desay Battery in China.
Cameras: Sony in Japan. OmniVision in the United States produces the front-facing FaceTime camera chip but subcontracts TMSC (in Taiwan) for manufacturing.
Chipsets and Processors: Samsung in South Korea and TSMC in Taiwan. Alongside their partner GlobalFoundries in the United States.
Controller Chips: PMC Sierra and Broadcom Corp in the United States (outsourced for manufacturing).
Display: Japan Display and Sharp in Japan. LG Display in South Korea.
DRAM: TSMC in Taiwan. SK Hynix in South Korea.
eCompass: Alps Electric in Japan.
Fingerprint sensor authentication: Authentec makes it in China but outsources it to Taiwan for manufacturing.
Flash memory: Toshiba in Japan and Samsung in South Korea.
Gyroscope: STMicroelectronics in France and Italy.
Inductor coils (audio): TDK in Japan.
Main Chassis Assembly: Foxconn and Pegatron in China.
Mixed-signal chips (such as NFC): NXP in Netherlands.
Plastic Constructions (for the iPhone 5c): Hi-P and Green Point in Singapore.
Radio Frequency Modules: Win Semiconductors (module manufacturers Avago and RF Micro Devices) in Taiwan. Avago technologies and TriQuint Semiconductor in the United States. Qualcomm in the United States for LTE connectivity.
Screen and Glass (for the display): Corning (Gorilla Glass) in the United States. GT Advanced Technologies produces the sapphire crystals in the screens.
Semiconductors: Texas Instruments, Fairchild and Maxim Integrated in the United States.
Touch ID sensor: TSMC and Xintec in Taiwan.
Touchscreen Controller: Broadcom in the United States (outsourced for manufacturing).
Transmitter and Amplification Modules: Skyworks and Qorvo in the United States (outsourced for manufacturing).
I'd prefer colors but the legend is:
Bold = US companies outsourcing to Asia Bold Italic - US companies not outsourcing Italic - Chinese company outsourcing to more expensive Taiwan ( Authentec) Striketrhough - Chinese companies not outsourcing. Rest - Non US first world companies not outsourcing
Nearly all of the ownership of the technologies and a fair amount of the components are built in first world countries, particuarly in Asia ( mostly in Korea, Japan and Taiwan - check their GDP if you doubt they are first world)
The Japanese and South Korean companies don't tend to outsource. Americans do, which begs the question of why. Is it because of costs? If so how come that is not an issue for Japan and why does Authentec outsource to a higher cost country ( Taiwan) if costs are everything. Clearly in that case expertise matters.
I think a lot is to do with where most of the other component manufacturing companies are located i.e in Asia. For smaller items - like accelerometers and cameras it looks like it doesnt matter so much ( although the gorilla glass is fairly bulky).
The rest is clearly culture. Sony executives in Japan probably feel that building in Japan is a good idea and manage costs accordingly.
So coal miners can't be retrained to assemble displays at Foxconn Appalachia?
I'll gladly pay $3,000 for a 19" LCD display just to subsidize the higher pay and benefits American workers will demand.
CAN I GET A USA!! USA!! GO TRUMP!!! HIGH GIVE?!
Anyone?
...crickets...
That's not even close to how much it would increase the price if it was assembled in America...
Let's say it takes half an hour to assemble a single TV, regardless of size.
Let's say these workers are getting paid $12 an hour.
the number of workers hands it goes through doesn't matter because there's no profit sharing, so that leaves us with basic math.
$12 / 2 half hours = $6.
It would cost $6 to assemble and package it in America, roughly.
Obviously that's more than they're paid in China, hell it could be a hundred times more we have no real way to know as that data isn't public.
Either way, when you're buying a $200+ TV/Monitor, a $6 price hike is barely noticeable, and literally 0 people would give a shit.
Especially with a big fat "Made in the USA" sticker
You're forgetting the other costs that are baggage and which reduce competitiveness for US businesses with employees, such as legal liabilities, insurance, workplace safety regulations, and so on. The actual costs per hour could be quite a bit more.
Take an iPhone for instance. Let's say that an assembly line in China has 60 people earning $2 an hour. Let's say the line produces 60 iPhones an hour (deliberately low balling here to simply the maths).
So the labour cost of assembly of an iPhone is $2.
Moving to the US and paying $12 an hour increases the labour cost per iPhone by $10. However this is likely a huge over estimate because 60 phones per hour is ludicrously small. If it were 600 an hour the cost increase would be from $.2 to $1.2 or $1.
And you could invest in machinery to reduce that further.
For low end items these figures matter. Apple could absorb it.
The real issue is the supply chain. It's mostly in Asia.
Ok, so let's get this right. In China, where their phones are assembled, Foxconn and others don't have an assembly line of 60 people working on these phones. I really don't know why you would guess any of this, because that all you've done, is guess. These iPhone assembly lines have 100,000 people on them, and there are several of those lines. Foxconn has said that they have about 400,000 people assembling iPhones. Those people, earn about $6 an hour, excluding benefits. Assembly value of iPhones is about $9 per phone.
the biggest problem here, is that we won't get people to work the way they do in third world countries (and the way they won't work there in too many more years).
they have hundreds of thousands of people moving hundreds of miles from their homes to live in barracks, where they have a single size bed, a locker at the foot of that bed, and a locker on the wall above the bed. They buy from the company store (just the way the song goes "Sold My Soul to the Company Store"), and stay there for 6 months to two years, sending money home to their families.
factories used to work that way here too, but not anymore. There is no way an American worker, or for that matter, workers from any developed country, would live that kind of life. It just isn't going to happen. Forget the costs. If it comes here, it will be done with factories that are totally automated, giving us almost no new Jobs.
For Christ's sake. I was using 60 people producing 60 iPhones an hour (ie one each) as an example of how, even in that extremely unlikely case of one per worker per hour, increasing the wages are not that significant relative to the component costs of the iPhone . I was clear about that.
If the production is higher than the per unit costs are lower. I also said that.
So American workers in minimum wage (or higher) could produce iPhones with little effect on Apples margins.
Aa for whether they will stay in barracks? Why would they have to? They will be earning enough to rent somewhere (the factories won't be in expensive cities).
That said if I were offered a place when younger with free (or cheap) housing and food I might have taken it. And of course that's exactly what people who join the army or are oil workers often do.
You weren't really saying that at all. I just went back and reread your post. Maybe you meant to say that, but you didn't. You're just guessing at everything., and maki g some incorrect assumption.
[…] campaign promises of President Donald Trump, to increase domestic job opportunities by driving companies to manufacture goods in the country, including Apple, but excluding Trump products of course.
Take an iPhone for instance. Let's say that an assembly line in China has 60 people earning $2 an hour. Let's say the line produces 60 iPhones an hour (deliberately low balling here to simply the maths).
So the labour cost of assembly of an iPhone is $2.
Moving to the US and paying $12 an hour increases the labour cost per iPhone by $10. However this is likely a huge over estimate because 60 phones per hour is ludicrously small. If it were 600 an hour the cost increase would be from $.2 to $1.2 or $1.
And you could invest in machinery to reduce that further.
For low end items these figures matter. Apple could absorb it.
The real issue is the supply chain. It's mostly in Asia.
Ok, so let's get this right. In China, where their phones are assembled, Foxconn and others don't have an assembly line of 60 people working on these phones. I really don't know why you would guess any of this, because that all you've done, is guess. These iPhone assembly lines have 100,000 people on them, and there are several of those lines. Foxconn has said that they have about 400,000 people assembling iPhones. Those people, earn about $6 an hour, excluding benefits. Assembly value of iPhones is about $9 per phone.
the biggest problem here, is that we won't get people to work the way they do in third world countries (and the way they won't work there in too many more years).
they have hundreds of thousands of people moving hundreds of miles from their homes to live in barracks, where they have a single size bed, a locker at the foot of that bed, and a locker on the wall above the bed. They buy from the company store (just the way the song goes "Sold My Soul to the Company Store"), and stay there for 6 months to two years, sending money home to their families.
factories used to work that way here too, but not anymore. There is no way an American worker, or for that matter, workers from any developed country, would live that kind of life. It just isn't going to happen. Forget the costs. If it comes here, it will be done with factories that are totally automated, giving us almost no new Jobs.
For Christ's sake. I was using 60 people producing 60 iPhones an hour (ie one each) as an example of how, even in that extremely unlikely case of one per worker per hour, increasing the wages are not that significant relative to the component costs of the iPhone . I was clear about that.
If the production is higher than the per unit costs are lower. I also said that.
So American workers in minimum wage (or higher) could produce iPhones with little effect on Apples margins.
Aa for whether they will stay in barracks? Why would they have to? They will be earning enough to rent somewhere (the factories won't be in expensive cities).
That said if I were offered a place when younger with free (or cheap) housing and food I might have taken it. And of course that's exactly what people who join the army or are oil workers often do.
You weren't really saying that at all. I just went back and reread your post. Maybe you meant to say that, but you didn't. You're just guessing at everything., and maki g some incorrect assumption.
I said "let's say that..." signifying a thought experiment . I then went on to use different figures . Your inability to understand simple English is your problem not mine .
Take an iPhone for instance. Let's say that an assembly line in China has 60 people earning $2 an hour. Let's say the line produces 60 iPhones an hour (deliberately low balling here to simply the maths).
So the labour cost of assembly of an iPhone is $2.
Moving to the US and paying $12 an hour increases the labour cost per iPhone by $10. However this is likely a huge over estimate because 60 phones per hour is ludicrously small. If it were 600 an hour the cost increase would be from $.2 to $1.2 or $1.
And you could invest in machinery to reduce that further.
For low end items these figures matter. Apple could absorb it.
The real issue is the supply chain. It's mostly in Asia.
Ok, so let's get this right. In China, where their phones are assembled, Foxconn and others don't have an assembly line of 60 people working on these phones. I really don't know why you would guess any of this, because that all you've done, is guess. These iPhone assembly lines have 100,000 people on them, and there are several of those lines. Foxconn has said that they have about 400,000 people assembling iPhones. Those people, earn about $6 an hour, excluding benefits. Assembly value of iPhones is about $9 per phone.
the biggest problem here, is that we won't get people to work the way they do in third world countries (and the way they won't work there in too many more years).
they have hundreds of thousands of people moving hundreds of miles from their homes to live in barracks, where they have a single size bed, a locker at the foot of that bed, and a locker on the wall above the bed. They buy from the company store (just the way the song goes "Sold My Soul to the Company Store"), and stay there for 6 months to two years, sending money home to their families.
factories used to work that way here too, but not anymore. There is no way an American worker, or for that matter, workers from any developed country, would live that kind of life. It just isn't going to happen. Forget the costs. If it comes here, it will be done with factories that are totally automated, giving us almost no new Jobs.
For Christ's sake. I was using 60 people producing 60 iPhones an hour (ie one each) as an example of how, even in that extremely unlikely case of one per worker per hour, increasing the wages are not that significant relative to the component costs of the iPhone . I was clear about that.
If the production is higher than the per unit costs are lower. I also said that.
So American workers in minimum wage (or higher) could produce iPhones with little effect on Apples margins.
Aa for whether they will stay in barracks? Why would they have to? They will be earning enough to rent somewhere (the factories won't be in expensive cities).
That said if I were offered a place when younger with free (or cheap) housing and food I might have taken it. And of course that's exactly what people who join the army or are oil workers often do.
You weren't really saying that at all. I just went back and reread your post. Maybe you meant to say that, but you didn't. You're just guessing at everything., and maki g some incorrect assumption.
I said "let's say that..." signifying a thought experiment . I then went on to use different figures . Your inability to understand simple English is your problem not mine .
if LG can make it in Korea, why not US? as for lack of talent, look like Foxconn just want to dump the same FAB to US, not the latest automated (less labour intensive) fab... Yes, there is a worry - environmental gov regulation. more stringer than china. As for talent worker, I am sure with good training program, you will have work force that willing (HR is the key, not those constant snap chat type... deadly in cleanroom). if intel can make chip in US, sure display can (Intel pull it back from Taiwan after find the FAB is not safe guide IP... that is why intel still exist... but some other out source name are no longer in the market). Anyhow, apple is in bed with Japan display, Foxconn might not matter that much after 2018... IMHO.
Comments
Heres a list I got from MacWorld
http://www.macworld.co.uk/feature/apple/where-are-apple-products-made-how-much-does-iphone-cost-make-india-3633832/
I'd prefer colors but the legend is:
Bold = US companies outsourcing to Asia
Bold Italic - US companies not outsourcing
Italic - Chinese company outsourcing to more expensive Taiwan ( Authentec)
Striketrhough - Chinese companies not outsourcing.
Rest - Non US first world companies not outsourcing
Nearly all of the ownership of the technologies and a fair amount of the components are built in first world countries, particuarly in Asia ( mostly in Korea, Japan and Taiwan - check their GDP if you doubt they are first world)
The Japanese and South Korean companies don't tend to outsource. Americans do, which begs the question of why. Is it because of costs? If so how come that is not an issue for Japan and why does Authentec outsource to a higher cost country ( Taiwan) if costs are everything. Clearly in that case expertise matters.
I think a lot is to do with where most of the other component manufacturing companies are located i.e in Asia. For smaller items - like accelerometers and cameras it looks like it doesnt matter so much ( although the gorilla glass is fairly bulky).
The rest is clearly culture. Sony executives in Japan probably feel that building in Japan is a good idea and manage costs accordingly.