Business Bytes
Renee Oricchio

How About American-Made iPhones?

 

Apple employs about 25,000 Americans from sea to shining sea. That sounds pretty good until you consider that the iPod/iPhone/iPad revolution has created some 250,000 jobs in China. Here's a modest proposal: bring those manufactoring jobs home, Apple. What would happen?

The Good News

1. 250,000 jobs! But not just any 250,000 jobs; specifically 250,000 solid jobs for lower skilled and/or undereducated adult Americans. Welcome back to middle class America, folks! Yes, we need white collar job growth too. But, the blue collar crowd has been neglected for so long that its on the endangered species list.

2. Reduce the U.S. Trade Deficit. According to a study put out by the ADB Institute back in 2009, the iPhone is responsible for adding 1.9 billion dollars to our annual trade deficit because its made in China.

3. I know what you're thinking. I'm picking on Apple again. Yes, I am. And yes, I realize there are countless other U.S. based tech companies that innovate here and manufactor over there. The point I am hopefully making in this posting naturally applies to the other companies, as well. Additionally, I will say this. Apple is the biggest tech company on earth now. It is not just a leader. It is the leader; beloved, feared and admired not only for its killer products, but its killer business acumen. If Apple did something bold like move its manufactoring to the States, others would surely follow.

The Bad News

1. I bet you're wondering; just how much would a U.S. made iPhone cost? That's always the arguement against these kinds of wide-eyed fantasies. That same study by ADB actually crunched the numbers and has an answer. It would cost Apple about $240 to make an iPhone here. As the study suggests, a $500 iPhone would still give Apple a 50% profit margin. Would you pay $500 for a U.S. made iPhone? (Personally, I would.)

Former Intel CEO, Andy Grove, wrote a great piece for Bloomberg Businessweek making a case for American businesses to make domestic employement a priority. I have referred back to it several times since I originally read it. Here it is.

 

Renee Oricchio is a technology writer and former supervising news producer for CNN Financial News. She has been covering the computer industry since 1987. @oricchio