How and Where iPhone Is Made: A Surprising Report on How Much of Apple’s Top Product is US-manufactured


iphone-thumbAre the last chapters of the iPhone saga unfolding? Not by any stretch of imagination, if you ask the Apple faithful. Definitely starting, if you ask the Android challengers.

The world and word war between Android and Apple just keeps escalating to ever greater heights, and has been the most engrossing story in business for quite a number of quarters now. Let’s not even talk courtroom battles and intellectual property clashes here. Very few technologies are completely new. Most owe a debt of gratitude to forebears who laid the foundation for all the awesomeness we carry around in our bags and pockets. Let’s just talk about sales.

The release of iPhone 6 last September 2014 put the focus once more on the Apple supply chain. I pointed out in a recent article tiny “cracks” in the Apple’s Chinese supply chain, notably the introduction of robotics to cut production costs. Will these machines displace Chinese workers in the future, too?

Clearly, Apple has never been as popular as it was in the 2nd quarter of 2013. In the Q3 earnings call, Apple reported that 31.2 million iPhones were sold in that quarter. In fact, 34 million units of iPhone 5 were sold in the first 100 days. This was a quarterly record for Apple. Contrast this with 26 million iPhones sold last year. The company’s flagship product still has firm believers worldwide. That’s not the whole story, however, because incredible as it may seem iPhone 5 sales figures in the last three quarters were lower than what Wall Street expected causing massive fluctuations in the value of Apple’s shares in the stock market.

From the left flank, it looks like the Android charge led by Samsung is gaining ground. In 2012, Apple lost its firm grip on the smartphone market and Android manufacturers were emboldened to match Apple’s products spec for spec and price point for price point. Apple still leads, but not by miles. By the end of July 2013, Android phones have 65% of all smartphone sales in the nine influential smartphone markets in the world (UK, Germany, France, Italy, Spain, USA, Australia, China, Mexico), although as a single model, iPhone still has the biggest slice of the pie – 26.3%.

In the aftermath of Apple’s double whammy release of the premium iPhone 5s and the more price-friendly iPhone 5c, the excitement over has skyrocketed to even greater heights. What fortune awaits the radical plastic-enclosed iPhone 5c? Is Apple running scared or is it just plain smart? Two can play the game, after all. If Android manufacturers are leveling up to Apple’s premium space, why can’t Apple level down to Android’s budget territory? It turns out that the iPhone 5c is not so cheaply priced, after all. It’s still a premium device targeted solidly at the mini versions of the flagship devices of Android rivals Samsung, HTC and Sony.

Fact is, Apple gets even more aggressive than usual. Weeks before the new iPhones were officially released, it implemented a trade-in program that will take hundreds of dollars off the price of the new handset if the customer turns in an older model in perfect working condition.

With sales of 9 million smartphones (combined for the 5s and 5c) reported on just the opening weekend, it looks like Apple has another winner in its hands and safely through with flying colors for the next four quarters, at the very least.

In this infographic we trace the iPhone supply and manufacturing chain. We’re providing snippets of information on just who is making the parts that go into the two new iPhones, and where, exactly, these parts are made. Did you know, that the much-touted fingerprint sensor was imagined in Florida, but manufactured in Asia by Taiwanese giant TMSC? How about the M7 motion co-processor? Did you know that it’s the brainchild of NXP, a company in the Netherlands, which has fabrication facilities in Taiwan, Thailand, Malaysia, Singapore and the Philippines?

Still, reports are coming in that US companies involved in the Apple supply chain are beefing up their US production facilities and many of the components that go into the iPhone are actually made Stateside and shipped to China for assembly.

What does the rest of the world contribute to the making of the iPhone? Let’s find out!

iPhone-infographic

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Category: Featured Articles, Infographics, Money & Entertainment

19 Comments »

  • A Mistake in the Statistcs says:

    Hey-I don’t see why you have to separate Inner Mongolia from China. It’s a province of China, while Mongolia (also known as Outer Mongolia) is a country. So most of the raw materials come from China.

  • Larry Davidson says:

    American’s can get their jobs back if they take shorter coffee breaks and work more overtime (with pay).

  • A Mistake in the Mistake says:

    Hey, Mistake, I think you made a Huge Mistake: you never read a History Book, so you don’t know that East Turkestan, Inner Mongolia and Tibet are Free Countries invaded and occupied by China.
    Before correcting others’ so-called mistakes, try not to make a mistake yourself, and start to correct your own mistakes (like never reading a History Book).

    • MiddleClassVoter says:

      Wow, you must know a lot about “A Mistake” … *never* is a strong word … of course, it’s easy to fling that type of accusation when you’re sitting behind a keyboard. Cut some slack. One day you’ll probably need some yourself.

    • Natasha says:

      Wow… you obviously know nothing. However China acquired the land, they have it now, so it is a part of China. Stop sounding so judgmental, pretty much every country in the world has once invaded and occupied another country, let’s not forget that most of today’s British people are descended from people who weren’t British, most Americans were at some point immigrants, and the same applies to Australia. Just so you know, I HAVE opened a history book, a world history book actually.

    • Jay Joe says:

      Hi, i think you know nothing about China. Your knowledge is less than that of a pre-school student.

  • Brian says:

    Beautiful graphics, I love this way of learning! Thank you!

  • Mark says:

    US Based Micron also makes dram and flash that is sourced into iphones and is actually bigger than Hynix now that the Japanese based Elpida aquisition is completed. And they have flash memory actually made in Lehi, UT, Manassas, VA, and developed in Boise, ID though much of there memory is also made outside of the states.

  • James C says:

    One respondent is correct – no reason to separate China from Inner Mongolia as countries of manufacturer since, in fact, Inner Mongolia is an autonomous region of China. It functions much as a province does except it has special legislative privileges as a result of a high percentage of ethnic Mongolians. In short, Inner Mongolia is China.

  • Riotmaker says:

    Look man you just help me with my product life cycle assessment for my engineering class. So thanks

  • EdgarForrester says:

    Instead of blaming Apple for moving out its manufacturing, why not give it an incentive to move back to the US, like tax breaks. It may be a case of losing a bit of tax revenues from Apple, but also added tax revenues from additional American workers in Apple. Heck, it may not even be about increasing or losing taxes, but spurring the economy in a little way. Replicate that with other American manufacturers and you’ll see a major shift back to a stronger US economy built on our factories.

    • David Holmes says:

      True, but tax breaks won’t cut it. Cheap labor is not the real game changer why Apple chose to outsource. It’s flexibility to scale production up and down depending on market behavior. This can be as immediate as in a few weeks—Apple suddenly needing a glass cover instead of plastic. We simply don’t have that scale of manufacturing compared to China, where a ship of nails that you need is just around the corner. In fact, we’re talking here of China, East Asia and Southeast Asia. The combined scale of manufacturing in these countries is just totally off the American scale. Here, it will take months to scale up any production; in the meantime, you’re losing in the market for failing to adjust. What to do then? Honesty, it will be a trial and error starting with a tax break, maybe?

      • Peter Quinn says:

        The formula is simple: you sell, you get rich. But today, we just buy goods from other countries. Where’s made in America in your grocery shelves? I bet the solution should also be straightforward—bring back our factories. Of course, that’s easier said than done. But it starts with corporate America to start thinking of this country’s future, not just theirs. The longer we keep on buying from abroad instead of selling to them, the more we get vulnerable every single day. We can’t beat China if we can’t knock some sense into our leaders both in private and in the government.

    • ncpinball says:

      Wait…..so let me see if i got this right…….you want to give a billion dollar corp. A tax break simply because you think we can make the money back by taxing their employee’s paycheck?……..

  • Jonny Rathbone says:

    By mine and my student Tyler’s calculation, the phones laid end to end would reach 11018.2 kilometres, not the 10x higher written here… ;)

  • bearmon2010 says:

    I can’t stand things that are Made in China. China, no thank you!

  • wal stir says:

    The lead designer of Apple’s products like the MacBook Pro, iMac, MacBook Air, iPod, iPod Touch, iPhone, iPad and iPad Mini isn’t an American – he is the British designer, Sir Jonathan Paul “Jony” Ive. see:

    “Who Is Jonathan Ive?”
    http://www.businessweek.com/stories/2006-09-24/who-is-jonathan-ive

    “The {Apple design} team, made up of thirty- and fortysomethings, has a definite international flair. Members include not only the British Ive but also New Zealander Danny Coster, Italian Daniele De Iuliis, and German Rico Zrkendrfer.”

    The original inspiration for Ive’s Apple designs is the German designer Dieter Rams of the Germany company 5204Braun.
    http://visual.ly/braun-or-apple

  • Eise says:

    Part of this process is the Foxconn factory – 1.2 million workers, the largest “fabs” in the world. For a month now I owe a Iphone 5c and by buying it I gave legitimacy to Chinese workers being paid $1.12 a month in 2013, which is $0.07 cents below the minimum wage in China according to wikipedia. The article speaks of a working week of 80 hours, while again legally they should work 40 hours.

    The article on the effects of these working conditions and this data can be read at the website of the dailymail – it is still online, so I assume what is says is true, otherwise it would have been deleted, because I think Apple does like this information and try everything to get it off.

    –> “Inside Apple’s Chinese ‘sweatshop’ factory where workers are paid just £1.12 per hour to produce iPhones and iPads for the West”

    http://www.dailymail.co.uk/news/article-2103798/Revealed-Inside-Apples-Chinese-sweatshop-factory-workers-paid-just-1-12-hour.html#comments

    • KenC says:

      The entry level salary at Foxconn where most of the iPhones are made is over 2000RMB a month, which is over $300 a month. If you read Apple’s Supplier Responsibility Reports available at their website, a 3rd-party produced report, you can read all about hours, overtime, violations, etc.

      Do you seriously believe the Daily Mail is a reliable source?

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