April 22, 2025 | 06:49 pm
TEMPO.CO, Jakarta - Trump’s ambitious dream of made-in-the-USA iPhones is expected to raise the prices through the roof. According to Dan Ives, the head of technology research at Wedbush Securities, the US-manufactured iPhone would cost around $3,500, or about Rp59 million at today's exchange rate.
The price estimates came after Trump’s push for entirely domestic production of Apple devices by imposing high import levies on Chinese products.
Apple CEO Tim Cook has explained that the main reason the company manufactures in China is not due to low labor costs, but due to the skills and the number of skilled laborers available in one location.
"The popular conception is that companies go to China because of low labor cost...but the truth is China stopped being a low labor cost country many years ago. That is not the reason to come to China...The reason is because of the skill and the quantity of skill in one location, and the type of skill it is," said Cook in 2017, as quoted from Mashable, Tuesday, April 22, 2025.
Domestic manufacture of iPhones will pose significant challenges for logistics and scale. Apple has thus far relied on hundreds of suppliers from various countries to get required components. If the manufacturing process is centralized in the US, the cost of shipping components on top of the import duties will significantly add to production costs.
Although Apple has announced a large investment in the US, including the construction of a factory in Houston, Texas, the facility is scheduled to start operating in 2026 and will focus on producing servers, not iPhones. This shows that the transition to domestic production will be a long and gradual process.
Willy Shih, a professor at Harvard Business School, stated that producing the iPhone in the US may be done in the future, but only if assembly can be fully automated. "But only when we get to much higher level of heterogeneous integration in the electronics, so phone assembly is easier to heavily or fully automate," said Shih, adding that high-value components still need to be imported.
Apple previously produced the Mac Pro in Texas in 2019 but faced challenges in producing special screws for the device. The volume of Mac Pro production is much smaller than iPhones, but Apple still ran into problems.
With iPhone shipments reaching around 225.9 million units in 2024, moving production to the US will be a major challenge. In addition to higher costs, labor availability and component supply are points for consideration.
Currently, Apple is expected to continue producing the iPhone overseas, with the possibility of increasing production in countries like India. The selling price of the iPhone may slightly increase, depending on the results of ongoing tariff talks.
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