Apple (AAPL) CEO Tim Cook has been taking some heat lately over the company’s Made in China tech. Not only is one of its biggest manufacturers, Foxconn, wrestling with worker suicide due to stressful labor conditions, but many have wondered why the hot selling product can’t be made in the U.S. instead.  Actually, a lot of the iPhone is already Made in the U.S.A.  A report written by three U.S. professors showed that only about “$10 or less in direct labor wages goes into an iPhone or iPad is paid to Chinese workers.”  The report points out that while the Apple products – including components – are manufactured in China, the primary benefits go to the U.S. economy because Apple continues to keep most of its product design, software development, product management, marketing and other high-wage functions in the U.S., not China.  China’s role is more of an assembler.  China Daily laid it all out in an article on Tuesday, saying that the iPhone starts out by Apple engineers in the U.S., is sourced with components from different parts of the world, mainly southeast Asia, and is only assembled at Foxconn in Taiwan.  Jason Dedrick, a professor at Syracuse University, said that China’s trade balance with the U.S. is marginally affected by Apple. That’s because most of the value in is captured by the brand itself, distributors and the retailers, not the manufacturers.  According to China Daily, citing the report, each unit sold in the U.S. for about $600 adds between $229 and $275 to the U.S.-China trade deficit per unit sold. Kenneth Kraemer, a professor from the University of California, said that most consumers don’t understand how Apple’s global supply chain works. “They focus only on the trade deficit with China, and therefore they think China has a bigger role. What they don’t understand is that China gets all sorts of input from other countries from Japan, the U.S., Malaysia and so on. China’s contribution is really a small amount of labor,” Kraemer was quoted as saying in the paper.
A China Daily article examines a report by three U.S. professors on where the iPhone is really made, and who benefits most from it sales abroad.