Wed, 25 Apr 2012 Apple must lower profit targets and manufacturer in US, report

Despite claims just days ago that Apple has to manufacturer the iPad in China in order to get access to rare earth materials (China has almost complete monopoly on the materials and mines 95 to 97 per cent of the world’s supply), a report is suggesting that Apple should make the iPhone in the US.

The report from the CRESC research centre asks: “For Americans and Europeans (who have problems maintaining current high wage manufacturing jobs): why are the assembly jobs in China when the assembly work could be done in the United States if Apple’s profits targets were lower?”

"If Apple were willing to accept lower margins and the 8 hours of assembly labour on the iPhone were on-shore and paid at US rates, Apple would still have a gross margin of nearly 50 per cent," the Apple Business Model: Financialization across the Pacific, report claims.

The report criticises Apple saying: “Apple hoards its cash surplus and the success for the stockholders does not align with the broader needs of the US economy and society”.

“Apple has become the world’s most valuable company, while Foxconn which assembles for Apple (and all the other brands of hand-held smart devices) is struggling to restructure and relocate to lower wage areas,” states the press release about the report.

When asked why Apple isn’t manufacturing the iPhone in the US, Apple’s late-CEO Steve Jobs told US President Barack Obama last February: "Those jobs aren't coming back."

According to a New York Times article, there are a number of reasons why Apple manufacturers abroad. Not only are workers cheaper, but overseas factories offer more flexibility, diligence and industrial skills. The article from last February refers to an example where last minute changes to the iPhone required workers to be woken up in the middle of the night, such a situation would never happen in the US.

Apple recently unveiled a webpage that showcases statistics suggesting the company supports more American workers than has been reported. The company claims it is responsible for a total of 514,000 jobs across all 50 states. Only 47,000 of those workers are employed directly by Apple. Another 257,000 work at companies that provide manufacturing, sales, delivery, and other support to the company. The remaining 210,000 jobs exist in the so-called "app economy" - the host of third-party software developers who create programs for the iPhone and iPad.