The estimate was moving manufacturing in the US would cost up to 65$ per iPhone and Apple is selling around 80 million iPhones a year. That approximation 5 billion dollars in lost profit each and every year just to build iPhones in the US. That's simply untenable for a publicly traded company even ignoring the added cost for iPod's and iPad's. Now they could probably give up say 100 million in profit per year and have dramatically better working conditions in China, but even that's a hard sell to stockholders.
Having said that, Apple could redesign the iPhone to be easier for robot's to assemble and move manufacturing back to the US, but it's simply untenable to have Americans assemble such things at this scale in the US. But, this is where the supply chain issues show up and if they designed the iPhone to be built by robots they would as you suggest probably locate those robots in China.
The estimate was manufacturing in the US would cost up to 65$ per iPhone
Versus how much in China? The conclusion I recall was that the difference was small - so small that even if the prices were flipped, Apple would still probably opt for China because of the speed. Which, again, is because of the integrated supply chain.
That was how much extra the labor would cost to manufacture in the US not the total cost. They did mention a low estimate of 10$ but that's still close to a billion a year in lost profits on iPhones. Add iPod's, iPad's, and Mac's and you quickly get back around 5 billion.
You are correct, and I wanted to check what exactly they did say. Luckily, there is a full transcript: http://podcast.thisamericanlife.org/special/TAL_460_Retracti... The discussion on this point starts on page 17. In there is the point I originally wanted to make, voiced by Charles Duhigg:
But labor is such an
enormously small part of any electronic device, right? Compared to the cost of buying
chips or making sure that you have a plant that can turn out thousands of these things a
day or being able to get strengthened glass cut exactly right within, you know, two days of
this thing being due, that's what's important. Labor is almost insignificant. What is really
important are supply chains and flexibility of factories.
Let's put it this way if your adding 5% to the cost of the product adding a 4 week supply components that you sell at 1/2 price every year. Moving iPhone manufacturing to the US would cost Apple significantly more than that. It's true that one of the major problems with a supply chain for computer components is how rapidly they depreciate, but labor costs are insignificant in large part because they are in China.
Honestly, I think he is thinking you assemble an iPhone like you do a car with giant welders and cranes. The reality is much closer to just a table with buckets for components and a small chain of workers that knows all the steps plus some basic quality control. Because, it's mostly just joining components.
The actual chips are created by machines which can be located just about anywhere, just ask Intel. Even boards are often done by machines, because it's so hard to tell if someone did it wrong when soldering by hand. There are robots that can do these same operations, but humans add flexibly and it's easy to see if they messed up. Plus at current Chinese wages they just plane cost less.
The PCBs in cell phones are almost exclusively done by machines. You can't hand solder a BGA, a machine applies solder paste as the last step in the PCB manufacturing process and then a pick and place (robotic arm pulling parts off reels) sets the chips before sending the PCB through a reflow machine (an oven).
Even for small batch runs of boards with QFP chips (which you can hand solder) you would machine all this, and I mean like 50 board runs. I've even done this in lab for 10 board proto runs. You make a solder paste stencil out of plastic to apply the paste after you get the boards back from the PCB manufacturer, place the chips and solder them in a reflow oven (or even a frying pan works if you paying attention and have an IR temp sensor).
The only bits you hand solder, even in Asian, are components that are too large or can't withstand the temperatures of machine soldering, be it wave or reflow (think full size RCA connectors on a board with many fine pitch ICs or a wall wart). This is normally a post processing step after everything else has been reflowed. Connectors of this type don't really exist in cell phones, they are all surface mount with some minimal unsoldered through hole supports.
The manual assembly that comes into play with a modern cell phone involves connecting the various PCBs with their interconnects and placing them in the proper location within the packaging and of course all the post electronics stuff.
But, it looks like the iPhone uses screws where a lot of companies used blobs of sodder to secure things. http://www.youtube.com/watch?v=5U6HjbGCtqE Which I suspect increases their labor costs to reduce the number of assembly errors and allow them to be repaired. Of course if they did this in the US, the cost benefit equation changes and I suspect they would do more soldering because it's so fast.
PS: The point I was trying to make with Intel is once your 99.9% automated vs say 98% the laber costs stop being the major concern. Which is why Intel still builds chip factory's in the US. It's great to be close to your suppliers, but it's also valuable to be closer to your engineering team.
Both videos are about very different classes of devices from a "modern cell phone". For example you can't blob solder on a data link to a 960 × 640 full color LCD, you'd lose signal integrity.
Intel builds their factories in the US because they are required to by law (export controls on certain high tech). I think they are allowed to build some lower tech stuff outside the US (Israel for instance).
Having said that, Apple could redesign the iPhone to be easier for robot's to assemble and move manufacturing back to the US, but it's simply untenable to have Americans assemble such things at this scale in the US. But, this is where the supply chain issues show up and if they designed the iPhone to be built by robots they would as you suggest probably locate those robots in China.