Apple iPhone Production In The US Could Be Near Impossible Thanks To Screws?
The vast majority of Apple's product manufacturing takes place overseas, and mostly in China. Labor costs are cheaper in China than they are in the United States, and while Apple CEO Tim Cook contends that is not the reason why, we have to think it plays a role. Even if that was not the case, however, there are other challenges in bringing more of Apple's manufacturing to the US. Something as simple as a screw could stand in the way.
More on that in a minute, but first let's discuss why this matters. There are increasing tensions between the US and China, primarily over cybersecurity—the US government strongly urges companies not to do business with Huawei and ZTE, for example. This is also a trade war, which could potentially spill over into tariffs placed on phones made in China.
Apple needs to prepare for that scenario, as its iPhone business is the reason why the company is so valuable. However, making iPhone devices in the US is not as simple as opening a plant or placing an order with an existing one. Jack Nicas at The New York Times wrote an interesting piece on the challenges that exist, one of which is simply making the right types of screws.
This is highlighted by the manufacturing issues Apple has faced with its Mac Pro at its Texas facility. Apple announced in 2012 that it would assemble the $3,000 computer in the US, but according to several people who worked on the project, the company had a tough time finding enough screws for things to run smoothly.
That is not a problem in China, because there are factories that can make large quantities of screws in short order. In contrast, the Texas plant could produce only up to 1,000 screws per day, and sometimes the design would change. That is simply not enough for mass production.
The point of the article is not just that a supporting piece like a custom screw could stand in the way of producing more products in the US, but that China has the scale and infrastructure needed for the type of demand that exists for Apple's products. It also has the skill and workforce.
"In the US, you could have a meeting of tooling engineers and I’m not sure we could fill the room. "In China, you could fill multiple football fields," Cook said at a conference in China in late 2017.
The way around this is to make massive investments in US production, and shift some of the workforce to robotics. That seems unlikely to happen, though. Even if there are tariffs on phones made in China, Apple could look to other places for its supply chain, and is reportedly focused on India and Vietnam at the moment.