Published May 31, 2012
Several key parts in Apple’s iPhone and iPad are actually made in America -- and Apple CEO Tim Cook hopes someday the entire product might be.
“I want there to be [manufacturing in the U.S.]," Apple CEO Tim Cook said Tuesday during an interview at the All Things D conference in Rancho Palo Verdes, Calif.
"This is not well known ... but the engine for the iPhone and the iPad are built in the U.S. in Austin, Texas," Cook said. "The glass is made in a plant in Kentucky," he added.
“Insourcing” the next iPad would be costly, requiring a capital investment as great as $10 billion. It would also bring tens of thousands of jobs to the United States, said Professor Z. John Zhang of the University of Pennsylvania’s Wharton School of Business.
“It’s not impossible,” Zhang told FoxNews.com.
An Apple plant would require tens of thousands of jobs. “That’s why in this case, the company at a minimum should take a look at this,” he said.
“U.S. factories can make anything a Chinese factory can,” said Tom Halfhill, senior editor at The Microprocessor Report and a technology analyst with The Linley Group.
But for a product to earn a Made in USA label, it must be "all or virtually all" made in the U.S. , according to the FTC. Is Cook’s wish reasonable? Could the next iSomething be entirely made in the U.S.A.?
The face of the iPhone is a glass panel manufactured in Asia by companies like Sharp, LG, and Samsung. But the glass itself is indeed made in the U.S.A.
“Mr. Cook is correct: Corning does produce Gorilla Glass for Apple from our Harrodsburg, Kentucky manufacturing plant,” Dan Collins, vice president of communication for Corning, told FoxNews.com.
“We have produced such glass for Apple's iPhone since the product introduction in 2007,” he said.
For the iPhone, Corning -- the New York company that Thomas Edison turned to in 1879 to make the glass bulb for its incandescent lamp -- ships massive sheets of glass to China for assembly.
If Apple wanted panels made in America instead, they would cost much more.
“Roughly $4 billion would get them into the panel business,” Alfred Poor, founder of the HDTV Almanac and a long-time monitor industry insider, told FoxNews.com.
Poor, who has toured the Corning plant, said that building an LCD fabrication line and assembly plant next to the glass factory in Kentucky would let Apple bypass Sharp and Samsung and make its own LCD screens.
“Altogether, for a typical 10-inch panel that would cost $61, it might cost $67. We’re talking a $6 increase for the price, maybe,” Poor said.
The heart of any piece of technology is the central processing unit (CPU) -- and many of them are already made in the U.S. Last year Intel broke ground on new fabrication plants in Arizona and Oregon, and AMD-spinoff GlobalFoundries is building one in upstate New York.
These state-of-the-art plants can cost up to $5 billion to build and start up, however. That’s why Apple turns to partners to make those chips.
Lately, Apple has been turning to Texas.
"The engine for the iPhone and the iPad are built in the U.S. in Austin, Texas," Cook said Tuesday -- a reference to a giant, $3.6 billion Samsung plant that recently began making the brains in the iPhone and iPad, according to a Reuters article.
Apple employs nearly 500,000 workers in China at about $4,524 a year, Zhang said. “Let’s imagine Apple just laid off everyone in China and used that money to hire people in this country.”
Total labor costs in China to employ those half a million workers are $2.26 billion. Apple would only be able to hire 33,705 workers in the U.S. without increasing labor costs.
“Imagine that Apple wanted to use these 33,705 people to produce the same quantity of goods … that implies that every worker has to be 15 times more productive than the workers in China,” Zhang said -- clearly a challenge.
According to an in-depth January analysis by the New York Times, China provides engineers at a scale the United States simply could not match. Apple’s executives estimated that about 8,700 engineers were needed to oversee the 200,000 assembly-line workers building iPhones.
It would take as long as nine months to find that many engineers in the U.S., the Times said.
The biggest obstacle is the details. Making the myriad tiny electronic components in the U.S. is simply unreasonable, the experts said.
“Apple would still have to ship some components from their Asian sources to the U.S. factory ... insourcing everything would be difficult,” Halfhill told FoxNews.com.
But the final assembly could be done in the U.S. That’s how the car industry works.
The 2011 Hyundai Elantra GLS is assembled in Montgomery, Ala. But 65 percent of the parts are actually manufactured in Korea. The 2012 Buick Lacrosse is assembled in Kansas City, Kan. -- but 40 percent of parts are made abroad.
That wouldn’t earn the FTC’s label, but it might earn good will.
“If Apple were to do it, my guess is it won’t be driven by straight economics. It will be driven by goodwill concerns,” Poor said.