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US President Donald Trump has once again talked about taking the manufacturing of iPhones to America. He wrote on the social media 'Truth', "I had told Apple's (CEO) Tim Cook a long time ago that iPhones sold in America should be made in America, not in India or any other country. If this does not happen, Apple will have to pay at least 25% tariff in America."

Earlier on May 15, Trump had also said this at a business summit in Doha. The question is why does Trump want to take the manufacturing (assembling) of iPhones to America? To understand this, it is important to know the economics of the iPhone.

How many countries are involved in the manufacturing of an iPhone?

At least a dozen countries are involved in the manufacturing of iPhones. If the price of a phone is considered to be $ 1000, then Apple gets the biggest share of $ 450 in it. The company takes this money in the name of software, design, and brand. The US component manufacturers Qualcomm and Broadcom earn $80. Taiwan gets $150 for chip manufacturing. South Korea earns $90 for OLED screens and memory chips and Japan $85 for camera systems. Other countries like Germany, Vietnam, and Malaysia contribute small parts whose value is around $45.

Then come India and China, where the iPhone is assembled. Both countries earn around $30 per device, which is about three percent of the iPhone's retail price. The value of this final stage of iPhone manufacturing may be low, but it employs a large number of people. Around 60,000 people work on the iPhone assembly line in India and about three lakh people in China.

This is why Trump wants manufacturing in America.

According to Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), "If the iPhone is assembled in America instead of India, then 60,000 people will get jobs there immediately. If the company also moves its assembly line from China to America, then another three lakh people will get jobs. This is the reason why Trump wants iPhone manufacturing in America."

Assembly costs will increase 13 times in America.

Although this will be entry-level manufacturing, its cost will be very high. In India, the employees doing assembly get an average of 230 dollars every month. In contrast, the minimum salary in states like California in America is 2900 dollars. This is 13 times more than in India. In this way, the cost of assembling an iPhone will increase from 30 dollars to 390 dollars. If Apple does not increase the price of the phone, then its margin per device will decrease from 450 dollars to 60 dollars.

India will also benefit, know-how

Srivastava said, "If Apple takes the manufacturing of the iPhone to America, then not only American citizens will get jobs, but the US economy will also benefit from this. But contrary to popular belief, India will also benefit from this. India earns $ 30 per iPhone. A large part of this goes to Apple as a subsidy under the PLI scheme. Reducing import duty on smartphone components is hindering the development of the component ecosystem at the domestic level. If Apple's assembly goes out of India, then India will also invest in deep manufacturing like chips, displays, and batteries. "

He said that this will also reduce America's trade deficit, an issue which Trump has been raising repeatedly. India's share in every $ 1000 of iPhones is only $ 30, but when it comes to trade deficit, the entire value is added.

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.