Tuesday, December 11, 2012

Two excellent graphs showing the difference in the cost of producing an iPhone in the US and China and the profit margin associated with that difference.

I came across a research paper while reading about Apples announcement that it was going to move some of its production back to the US (article HERE). The paper is HERE. There were two graphs that I thought were interesting.

The first one show the cost of the component parts and labor (inputs) that go into producing an Apple 4G iPhone in China (keep in mind these are JUST the costs associated with these inputs. It does not include many other costs associated with making the phone and getting into your hands) and the second one shows the cost of producing it in the US.

Notice all component costs stay the same BUT the labor cost is the big variable between the countries.

I have no big point to make here. Just something to make you go "Hmmmm".... :)


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