Why Apple can't easily relocate iPhone production to the US: over 2,700 parts, 187 suppliers, and 28 countries

Apple's iPhone production relies heavily on global suppliers.

: Apple faces challenges relocating iPhone production to the US due to its reliance on 187 suppliers across 28 countries for over 2,700 parts. A significant portion of these components are sourced from China, with less than 5% manufactured domestically in the US. Foxconn dominates the assembly of iPhones, producing around 85% of the units predominantly in China. Moving production entirely to the US would involve a significant cost increase and complex supply chain adjustments.

Apple's efforts to move iPhone production to the United States involve overcoming numerous logistical hurdles. The complexity arises mainly due to the intricate supply chain, which involves over 187 suppliers spread across 28 countries, supplying more than 2,700 components necessary for iPhone manufacturing. Most suppliers are located in China, indicating a significant dependency that complicates re-localizing production processes.

Another critical factor is the minimal percentage of components currently manufactured within the US—less than 5%. These include specific high-tech parts like the glass casing and Face ID lasers, although some elements of these components, like backlit displays, are still sourced from China. This interdependency highlights the intricate global network Apple relies on for production.

Assembly is another area dominated by foreign facilities, mainly those operated by Foxconn. This company is responsible for assembling around 85% of all iPhones, with most of this activity occurring in China. An underlying reason is the availability of a skilled workforce capable of precise and high-volume production, a feature China prominently offers.

The US government's intentions, led by the previous administration's policy of imposing heavy tariffs, were to encourage domestic manufacturing. However, as Apple CEO Tim Cook noted, the specialized skills needed for advanced production and tooling are currently more available in existing overseas facilities. Addressing this gap would require substantial investment and time to establish similar capabilities domestically.

Moreover, predictions suggest that relocating production solely within the US could drastically increase iPhone prices, potentially reaching around $3,500 per unit. Additionally, Apple is planning to shift some production lines to India by 2026, becoming a strategic move amid global trade tensions, but full US production seems unattainable. The prospect of assembling iPhones domestically involves significant logistical and economic challenges that extend beyond mere policy encouragement.

Sources: TechSpot, Financial Times

SmartphoneManufacturing