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Not Really ‘Made in China’
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The iPhone’s Complex Supply Chain Highlights Problems With Trade Statistics
One widely touted solution for current U.S. economic woes is for America to come up with more of the high-tech gadgets that the rest of the world craves.
Yet two academic researchers estimate that Apple Inc.‘s iPhone?one of the best-selling U.S. technology products?actually added $1.9 billion to the U.S. trade deficit with China last year.
How is this possible? The researchers say traditional ways of measuring global trade produce the number but fail to reflect the complexities of global commerce where the design, manufacturing and assembly of products often involve several countries.Signature
Tightwad.
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iPod analysis rehashed for iPhone. No new info.
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Stay Hungry. Stay Foolish. - Steve Jobs
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These researchers missed the further point that the rest of the iphone price (~$620 - $178 = ~$440/phone) goes mainly to the US trade surplus on all iPhones sold outside the US. Some of this $440 goes to shipping (Fedex profit?) and reseller (or Apple store) expenses such as local labor, etc. but most of the $440 per iPhone goes back to Cupertino in the form of opex/SG&A and profit contributions.
The same holds for all of Apple’s other sales outside the US. Thus, Apple’s foreign sales—which are now >50% of total sales—make a huge net positive contribution to the US trade balance.
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@Hannibal, agreed. Although don’t forget that the ultimate ‘profit’ derived by AAPL is attributable to shareholders, who can be based in any country on earth… so yes, a portion of the COGS and SG&A goes into the american economy, it’s important to remember that a significant amount of the ‘value’ created by AAPL could be exported outside the US…
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@Hannibal, agreed. Although don’t forget that the ultimate ‘profit’ derived by AAPL is attributable to shareholders, who can be based in any country on earth… so yes, a portion of the COGS and SG&A goes into the american economy, it’s important to remember that a significant amount of the ‘value’ created by AAPL could be exported outside the US…
Somehow Apple and AAPL have been thought of as the same in this topic.Signature
Adversity does not just build character, it reveals it.
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Mark - not sure what you mean by the above, but how are they not the same in this case?
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Mark - not sure what you mean by the above, but how are they not the same in this case?
The price of AAPL can be 150 0r 300 right now, does not change the price of Apple’s products. This has been discussed many times, always separate the two. Apple operates without regard to the price of AAPL.Signature
Adversity does not just build character, it reveals it.
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OK, I see where you are coming from. I tend to use AAPL and Apple interchangeably.
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OK, I see where you are coming from. I tend to use AAPL and Apple interchangeably.
I know, it is a mistake many make. I also might help you get where I am coming from on some of my other postings.
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Adversity does not just build character, it reveals it.
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So if you swap Apple with AAPL in my last post it’s still a valid point nonetheless?!
