【2024 Archives】

President Donald Trump's tariff policy has thrown the global economy into crisis024 Archives with the stated goal of bringing manufacturing back to the United States. In addition to global tariffs of 10 percent, the president has imposed a seemingly ever-increasing reciprocal tariff on imported Chinese goods (the White House's latest figure is 245 percent). Considering how many iPhones are made in China, this could mean a sharp price increase for Apple's most important product.

Could Apple alleviate tariff pressure by moving production back home? White House Press Secretary Karoline Leavitt recently told the press that President Trump believes it is possible.

"He believes we have the labor, we have the workforce, we have the resources to do it," she said.

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But is it really feasible to manufacture an iPhone in the United States? And if Apple were to completely manufacture and assemble the iPhone in the U.S., how much would it cost?

The short answer? The mythical made-in-America iPhone would cost about$3,000, but it would cost Apple billions more. Let's break it down.

Where are iPhones made, and how much do they cost to make right now?

The answer isn't as simple as the White House would have you believe. To even begin answering it, we first have to face the fact that we don't know how much it costs to manufacture an iPhone right now. Apple has never shared the exact figure, and probably never will. Even if we knew the exact cost of every single part that goes into an iPhone, as well as all the other production costs that go into manufacturing an incredibly complex device like that, there are still other associated costs, including research and development and marketing.

But we have to start somewhere, so let's take last year's figures by investment bank TD Cowen (via AppleInsider), which estimated the total "bill of materials" cost of making an iPhone 16 Pro Max at $485.

The figure is a simplification and (possibly) an amalgamation, because Apple doesn't produce its iPhones in just one place. Counterpoint Research estimates that roughly 80% of iPhones are produced in China, with the rest being manufactured in India. The sum of production costs probably isn't the same for each iPhone manufacturing plant, and this discrepancy is likely to drastically increase given that the current tariff on Indian imports is 10%.

Apple CEO Tim Cook holds an iPhone 15 during an Apple event in Cupertino, California Credit: Justin Sullivan / Getty Image

Even if Apple were to start manufacturing iPhones in the U.S., the process would likely be gradual. The company recently announced a $500 billion investment in the U.S. over the next four years, including a new factory in Houston, Texas, which will create "thousands" of jobs. But that factory will open in 2026, and in it, Apple will manufacture servers, not iPhones.

For comparison, Taiwan-based Foxconn — Apple's chief manufacturing partner for the iPhone — reportedly hired more than 50,000 new workers ahead of iPhone 16 production. The company employs nearly one million full-time and part-time employees globally.

So, no matter how much the final product costs consumers, bringing iPhone manufacturing to the U.S. would cost Apple billions, and possibly tens of billions, more.

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Can it even be done?

All signs point to no — or, at least, not anytime soon. In 2017, Apple CEO Tim Cook laid it out very clearly: "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."

If you don't believe Cook, or his predecessor, Apple co-founder Steve Jobs, who shared a similar opinion in 2012, you can take a look at one of the rare, real-world examples we have. In 2019 (during Trump's first presidency), Apple committed to producing the Mac Pro in Texas. The sales volume of the Mac Pro is orders of magnitude lower than that of the iPhone, but Apple still ran into problems, such as being unable to produce enough of a specific kind of screw for the Mac.

Employees work at a Foxconn factory in Zhengzhou City, China. Credit: VCG / Getty Images

We also asked Willy Shih, Professor of Management Practice at Harvard Business School, if it would be possible, and his answer was a very cautious maybe. Some day, it will be possible to build the iPhone in the U.S., he told Mashable in an email interview. "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." He added, "we would still have to import a lot of high-value components."

In short, moving the entirety of iPhone production to the U.S. is something that would require many years, immense costs, and is unlikely to be cost-effective.

If it happened, how high would the price be?

Let's imagine that Apple truly committed to the goal of manufacturing the iPhone entirely in the U.S., and that the company pulled off this feat in the near future. How much would the iPhone cost if it was made in the U.S.?

One figure we've seen comes from Wedbush Securities' head of technology research Dan Ives, who says that a modern iPhone manufactured in the U.S. would cost around $3,500 (he didn't mention a specific model).

Shih agrees on this ballpark figure. By comparing the costs of assembly labor for a smartphone in the U.S. and China, and taking into account the differences between logistic costs, duties on components, and manufacturing yields, a guestimate is possible. He guesses that you'd end up with a U.S. retail price of "somewhere between $2,500-$3,000," but he stressed how many complex manufacturing obstacles Apple would need to overcome first.

The most expensive iPhone right now, an iPhone 16 Pro Max with 1TB of storage space, costs $1,599. Credit: Apple

Another figure, coming from Luke Capital investor Glenn Luk, who tackled the question in 2018, will make your eyes water. Luk claimed that the home-made iPhone would cost somewhere in the $30,000 to $100,000 range. Yup, that's six figures for an iPhone.

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"In fact, if Apple were forced to solely manufacture the iPhone in America, there is a good argument that it would not be able to manufacture any at all. And if they could somehow successfully make the manufacturing transition, capacity would likely be constrained to just a few million units a year, said Luk.

The massive discrepancy between these figures indicates that the question is incredibly difficult to answer. Undoubtedly, making the iPhone at home would be a lot pricier. Given the higher costs, and given how fluid the tariffs are, why would Apple commit to such a big manufacturing investment?

And let's not forget about the massive volume Apple is working with — the company shipped an estimated 225.9 million iPhonesin 2024. Building some iPhones in the U.S. is one thing, but producing sufficient volume to satisfy demand is a different story. "The key issues are obviously labor cost, whether you can recruit sufficient labor for the volumes they need, and of course the supply of components, many of which have never been made in the U.S.," said Shih.

Is there a more realistic scenario?

Given that President Trump has already walked back some of his tariffs, the answer is obvious: Apple will likely continue producing the iPhone overseas. The retail price of the smartphone will possibly go up a little, depending on where the tariff negotiations end up.

The company may also shift production to other countries, such as India (Foxconn has already moved some of its production capacity there, and is looking to expand further).

Finally, Apple may, over time, bring some of its production to the U.S. — though almost certainly focusing on devices that aren't produced at the iPhone scale.

The good news? That $3,000 iPhone isn't something you should fear, at least not right now.

Keep checking Mashable for our latest tariff news and explainers, from delayed Nintendo Switch 2 pre-orders to reports of iPhone 16 panic buying.

Topics Apple iPhone Money Tariffs