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April 12, 2012

What Apple's Supply Chain Says about US Manufacturing & Middle-Skill Training

Josh Stevenson:

In January, The New York Times released a front-page report on the iEconomy, Apple's vast and rapidly growing empire built on the production of tech devices almost exclusively overseas. The fascinating story created a wave of attention when it was published, and it's back in the news after NPR's "This American Life" retracted its story about working conditions at Foxconn, one of Apple's key suppliers of iPhones and iPads.

The end of the "This American Life" episode includes a discussion (audio | transcript) between host Ira Glass and Charles Duhigg, the NYT reporter who wrote the iEconomy piece, on Apple's supply chain and the reason the tech giant doesn't produce its insanely popular devices in the U.S. Perhaps you thought the main reason was labor costs; Apple would have to pay American workers much more than the estimated $17 a day (or less) many Chinese workers at Foxconn make. That's part of it, but "an enormously small part," Duhigg told Glass.

Duhigg explained that, in terms of labor costs, producing the iPhone domestically would cost Apple an additional $10 (on the low end) to $65 (on the high end) more per phone. "Since Apple's profits are often hundreds of dollars per phone, building domestically, in theory, would still give the company a healthy reward," he wrote in the NYT piece.

Posted by Jim Zellmer at April 12, 2012 1:41 AM
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