Posted on 04/10/2025 9:23:52 AM PDT by grundle
I asked Grok: “How much would an iPhone cost if all of the raw materials and ores, mining, refining, extraction, processing, design, programming, manufacturing, assembly, labor, and all other factors were done 100% entirely and exclusively in the United States?”
This is the answer that it gave:
Estimating the cost of an iPhone if every aspect—raw materials, mining, refining, extraction, processing, design, programming, manufacturing, assembly, labor, and all other factors—were done 100% in the United States is a complex task. It requires considering a wide range of variables, many of which depend on assumptions about supply chain restructuring, labor costs, infrastructure development, and economic feasibility. While precise figures are unavailable due to the speculative nature of such a scenario, I can provide a reasoned estimate based on available data and expert analyses.
Currently, an iPhone’s production cost (bill of materials plus assembly) ranges from approximately $400 to $558, depending on the model (e.g., iPhone 15 Pro Max costs around $558). This reflects manufacturing primarily in China, where labor costs are low (averaging $2–$10/hour), raw materials are sourced globally, and supply chains are optimized for scale and efficiency. Retail prices range from $799 to $1,499, incorporating research and development (R&D), software, marketing, and Apple’s profit margin (typically 60–62%).
Moving all production to the U.S. would significantly increase costs due to several factors:
1) Raw Materials and Mining: iPhones contain about 75 elements, including rare earths (e.g., neodymium, dysprosium), aluminum, gold, and silicon. The U.S. lacks domestic sources for many of these. For instance, China supplies 85% of global rare earths, and there are no bauxite mines for aluminum in the U.S. Establishing new mines and refining facilities would take years and billions in investment, driving up costs. Extracting and processing these materials domestically could increase raw material costs by 2–3 times due to higher environmental regulations, labor costs, and initial capital outlays. Current component costs (around $400–$500) might rise to $800–$1,500.
2) Labor Costs: U.S. manufacturing wages average $22–$30/hour, compared to $2–$10/hour in China. Assembly alone, currently estimated at $4–$10 per unit, could rise to $30–$112 per unit, depending on hours worked (e.g., 7–8 hours at U.S. rates). Total labor costs across mining, refining, and manufacturing could add hundreds more per unit, potentially $200–$500, given the need for skilled workers in a fully domestic supply chain.
3) Manufacturing and Infrastructure: The U.S. lacks the scale and expertise of China’s manufacturing hubs (e.g., Foxconn’s facilities). Building equivalent factories could cost billions, amortized over fewer units initially due to limited capacity. Analysts estimate this could add $50–$100 per unit in overhead. Automation might offset some labor costs, but the upfront investment would still elevate prices.
4) Design and Programming: Apple’s R&D and software development are already U.S.-based, costing billions annually (e.g., $18.75 billion in 2020). These fixed costs, spread across millions of units, wouldn’t change significantly per unit, but any expansion of domestic talent to replace overseas engineering could slightly increase expenses (e.g., 5–10% more, or $10–$20 per unit).
5) Scale and Supply Chain: China’s ecosystem allows for rapid, cost-efficient production (e.g., 500,000 iPhones daily). Replicating this in the U.S. would require decades and massive investment, reducing economies of scale. Some estimates suggest production might drop from hundreds of millions to single-digit millions annually, pushing per-unit costs higher. Extreme scenarios propose costs of $30,000–$100,000 if supply chains collapse and output shrinks drastically, though this assumes near-total inefficiency.
Combining these factors, a realistic middle-ground estimate emerges:
Raw materials and processing: $800–$1,500 (up from $400–$500).
Labor (mining, refining, assembly): $200–$500 (up from $10–$50).
Manufacturing overhead: $50–$100.
Design/programming: $10–$20 increase.
Total production cost: $1,060–$2,120 per unit.
With Apple’s current profit margins (e.g., 60%), retail prices could range from $1,700 to $3,400. However, some analysts suggest costs could climb higher—$2,400–$3,500 per unit—if supply chain inefficiencies persist, pushing retail prices to $4,000 or more. Extreme estimates of $30,000+ arise from scenarios where production scales down dramatically (e.g., to a few million units), but this seems unlikely given Apple’s ability to adapt.
The robots and the parts needed to assemble them are made in China .. bringing all of that here means more decades of building plants and hundreds of thousands of easily available workers in one area/city
Horrible confusing things from 30 years ago which have not become easier to use or less confusing in operation in 3 decades.
and China
I have a Samsung phone & have had the same one for so long I can’t remember when I got it. I do remember that this 5G phone replaced a 4G Motorola that I had for many years & that Motorola phone was fine, but I needed 5G for a new job.
The Motorola phone was a prepaid smart hone that cost $50 & service was $25 month for unlimited everything.
Does anyone really need the latest I-Phone that does nothing different than the last edition I-Phone?
Samsung, (South Korea) was smart to get operation out of China a few years ago and into India and Vietnam.
The ways it’s going, they’re going to crush Apple.
Apple’s going to need to cut their margins and start making things in US as well as non Chinese alternatives if they want to keep any market share.
ABC. Anyone But China.
To do all of that while adding all the other news jobs and keeping all the current ones - the US would need an additional 100 million people of more.
China doesn’t produce all these raw materials either. They just tried to corner the market with cheap slave labor.
Yep! Supply & Demand
I think we’d be happier as a Nation if we all didn’t have cell phones...
These cost numbers are way off
The direct manufacturing cost of an iPhone is much, much less than 400 - 600 bucks.
It is absurd to think that the direct US manufacturing cost of an iPhone would be $1000.00
“To do all of that while adding all the other news jobs and keeping all the current ones - the US would need an additional 100 million people of more.”
And because that will not happen, U.S. wages (and labor costs) will go up in the attempt to do it as a national (”bring industrial production home”) process.
Stupid analysis.
What a croc.
Internet warning ...
The availability of cheap international manufacturing in other countries has to be addressed in order to return enough jobs here.
Never underestimate the potential for US workers and companies to turn the screws on you when they think they have something resembling a monopoly.
Which doesn't mean I don't support having $4k smartphones here in the US. I mean, it's a little ridiculous to see a phone that is 5000x more powerful than the computers that landed Americans on the moon barely hanging out of the back pocket of a high school girl.
> I was listening to Peter Zehan ...
That right there was when you should have stopped ;-)
True that. Another generational difference between Boomers and X'ers is that, looking only at the ones who prepared for retirement, the X'ers had a higher proportion of DIY 401K and Roth IRA investors, while a higher portion of Boomers counted on pensions.
In other words, if your retirement planning is depending mainly on pensions and SS checks, then you're right that retirement income won't increase with more manufacturing jobs here. But if your retirement planning is mainly centered on investments, then America's middle class growing would mean your investment accounts growing and your annual 4% withdrawals will go up accordingly (your retirement income keeps up with inflation).
askif only robots are involved, old factories wont be revived, new dark ones will be built.
“That right there was when you should have stopped ;-)”
He turned out some decent videos and then, he went irrationally anti-Trump. Even if you absolutely hated Trump, you have to admit, he’s ben astonishingly successful. Zehan went TDS before Trump even entered office. I have seldom listened to him since. A few videos had some interesting aspects, but the moment he threw in the gratuitous TDS statement, I clicked away. I have been disinclined to listen to him lately.
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