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.
Hey, liberals LIKE their precious toys made in Chin,
Solidarity, you see.
It can’t be properly judged without considering the fact that the money to purchase the iPhones would go to our fellow Americans, and before that money flowed, Americans would be employed building the factories to make the phones.
Studies suggest a U.S.-made iPhone with human labor could cost $1,700–$4,000 retail due to wages and supply chain issues. Robotic labor slashes labor costs dramatically (from $200+ to $20–$40 per unit), aligning our estimate ($1,500–$2,000) with lower-end projections adjusted for automation.
Also from Grok
Low wages stifle innovation. This has happened in the past with serf labor in Europe. Everything was plodding along with impoverished serfs then the plague hit.
The surviving serfs could ask more money for their labor, planting the seeds for the industrial revolution.
Can GROK run for office?
What is not clear from the Grok response is whether the manufacture of a US iPhone includes economies of scale manufacturing or just a random part-for-part current cost equation.
Welcome to our jolly good Ship of Fools! We sail into impossibility in the hopes that our fantasies are made real.
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,
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,
3) Manufacturing and Infrastructure:..this could add $50–$100 per unit in overhead.
5) Scale and Supply Chain:.. Replicating this in the U.S. would require decades and massive investment,..retail prices could range from $1,700 to $3,400. However, some analysts suggest costs could climb higher—$2,400–$3,500 per unit
That’s a very good point. Xers have it better because we mostly have ROTH or converted out traditional IRA which means tax free…..yeah!
Response 10 above points in the other direction.
That article and site are from 1999, LONG before the ubiquity of Internet hazards.
The “best” the U.S. could hope for is U.S. companies moving overseas production from China to other countries where we presently have a trade surplus but unfortunately that is not where the largest available labor pools are; meaning those countries cannot replace China when it comes to labor, and most of the countries that could make up (altogether) jobs pulled from China are countries we already have a trade deficit with, or are countries that cannot now support or create the industrial expansion needed (like in Africa).
In sum, unless we are willing to break Americans appetite for consumption, turning Americans into producers and savers, not spenders (which seems politically infeasible) it is doubtful the U.S. can be more of an exporter and less of an importer. Walling off America as not much of an exporter but just near totally “self sufficient”, will just as quickly put America into a depression as anything else. A dope addict does not quit the addiction without a painful withdrawal. And getting through withdrawl is only the beginning, not the end. of a long recovery. Unfortunately spend, spend, spend federal governments, and federal reserve policies have only kept up Americans addictions for consumption and avoidance of saving. Maybe humpty dumpty has fallen and cannot be put back together.
So 200-500 plus Thing We Should Have Here Anyway.
Well within the current tariff scope.
And most of our investments are in Roth IRA's as well. Not all of our money has been converted yet, mainly because I'm quasi-retired, still have a taxable income, and thus don't want to put myself in a higher tax bracket. So I'm still converting tax-deferred money into Roth IRA money a piece at a time (just enough to max out our tax bracket without going into the next one). All of my wife's money is in Roth IRA. (She's a few years older, turned 59.5 last year, and the 5-year rule for her last conversion to Roth IRA expired this year. So every penny of her Roth IRA is available penalty free and tax free when we want to make withdrawals.)
After I retire I plan to do 4% annual withdrawals, maybe 1/3% per month, mainly from hers but not mine. This is in case the govt adds RMD's to Roth IRA's like they every now and then talk about doing (if they do we'll wish most or all of the money will be in my name because I'm younger).
Another thing I thought about doing is, as we withdraw year after year from her Roth IRA, is if the balance in her Roth gets down to equal to the mortgage balance, I'll quit withdrawing from her Roth IRA at all except for making the monthly mortgage payment. We'll count my Roth IRA as the one we live on, and her Roth IRA as the one we'd use to pay off the mortgage balance if we ever decided we had to (i.e. if there was some dispute between me and the bank and I said screw it, we'll own it outright). But if we always have a good relationship with the bank we'll keep her Roth IRA money invested and earning way more than the 3.3% interest rate of the mortgage, withdrawing from her Roth IRA just enough to make the mortgage payment.
Combine that with us not having hardly any energy costs (because of home solar, with an all-electric home, and doing most of our driving in our EV), then my Roth IRA is way more than enough to live off of. When my wife starts collecting SS two years from now it'll be gravy on the top.
Maybe humpty dumpty has fallen and cannot be put back together.
—
The stock, bond, and treasury markets are looking like they may follow Humpty Dumpty
The US does have most of the minerals to make Iphones but the eco-nut government has outlined the mining and processing of those minerals.
Effing AI bullshit. I swear, some folks here fall for it over and over.
It will depend on how much the customer is willing to pay. But even if they take only half the profit, it still is going to cost more and the essential minerals will still be coming from China.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.