Will iPhone prices go up? Apple is investing US$100bil in US manufacturing
Apple's pledge to invest an additional US$100bil (RM423bil) in the US will create a new US manufacturing program that not only aims to create thousands of jobs, but will also eventually outfit future iPhones and smartwatches with glass screens that are fully made in America.
Apple CEO Tim Cook unveiled the new investment Wednesday (Aug 6) evening at the White House alongside President Donald Trump. The news notches up Apple's commitment to invest in the US to a total of US$600bil (RM2.5 trillion) over the next four years to help shore up domestic manufacturing.
Those plans include expansions across nine states (Arizona, California, Iowa, Nevada, New York, North Carolina, Oregon, Texas, and Utah), plus building out a new Texas factory. Apple said it intends to hire 20,000 US workers these next four years, with core focuses among four areas: research and development, silicon engineering, software development, and AI.
There are nine companies so far that are partnering in the new manufacturing program, including the likes of Samsung, Texas Instruments, and Corning. Corning is a manufacturer that makes high-tech glass.
With a US$2.5bil (RM10.5bil) investment, Apple and Corning will prop up a glass factory in Harrodsburg, Kentucky, which will soon create glass screens for all iPhones and Apple watches. It's the first time that the glass that forms these gadgets' screens will be fully created within the US
'This is a significant step toward the ultimate goal of ensuring that iPhones sold in the United States of America also are made in America,' Trump said during Wednesday's press conference. 'Today's announcement is one of the largest commitments in what has become among the greatest investment booms in our nation's history.'
Corning produces Gorilla Glass materials, which cover the fronts of smartphones and tablets, along with Ceramic Shield, another advanced type of glass that's extremely durable. So when you drop your phone on its face, you should thank Corning if it emerges unscathed.
While Apple's products are designed in California, most of their assembly and production takes place overseas in places like China, according to Evercore ISI. If you flip to the back of a pair of Apple AirPod Pros, an engraving on the case reads: 'Designed by Apple in California. Assembled in Vietnam.'
It makes sense that the White House is quick to tout the investment and pile it into the accomplishments of the Trump administration. It's not easy to convince large companies to bring domestic manufacturing back home to the US when they've done so at a discount overseas.
But with the new sling of tariffs unveiled by the administration, some companies have been left with little choice. What remains unclear is how Wednesday's news will affect iPhone pricing.
Apple's iPhone has long been a premium product in the smartphone market. But when adjusted for inflation, iPhone pricing has, with a few exceptions, remained relatively stable over the years. The open question remaining is if that trend can continue as Apple lures more of its assembly line back to the US. – Inc./Tribune News Service
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