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  • Take a look at the back of any iPhone and you'll see a familiar phrase that's been printed

  • on almost one billion units of the iconic product.

  • Designed by Apple in California.

  • Assembled in China

  • Like everything at Apple, that wording is deliberate.

  • Apple designs the exterior, writes the software, researches new technologies and develops its

  • own chips in California, which allows it to to sell devices for 65 percent more than their cost

  • But iPhones are assembled in China for a reason.

  • It's easy to assume that reason is cheaper labor.

  • While wages are lower, this doesn't tell the whole story.

  • In fact, assembly is only 2% of an iPhones hardware cost.

  • Today, most iPhones are made in two chinese cities: Shenzhen and Zhengzhou.

  • Favorable government policies helped Shenzhen become the electronics factory to the world

  • with Taiwanese company Foxconn its biggest employer.

  • As a result, thousands of companies and millions of workers have moved to the southern Chinese

  • city to be close to the action.

  • During peak iPhone season, Foxconn hires almost a million people, cutting its workforce to

  • a few hundred thousand during low season.

  • Such a cluster effect in Shenzhen means that most of the components needed to make a phone,

  • a laptop, or a drone are within a fifty mile radius.

  • Attempts to recreate this cluster have so far failed.

  • Brazil is the perfect example.

  • Apple was facing high import tariffs in Brazil and urged Foxconn to make iPhones there.

  • After securing local incentives, Foxconn built a factory.

  • But very little changed.

  • Rather than doing lots of high-level manufacturing in Brazil, Foxconn continued to do most of

  • the work back in China where the supply chain was nearby and parts could be preassembled.

  • This meant that most of an iPhone was made in China and merely shipped to Brazil for

  • local workers to slot together like lego.

  • In the end, the Brazil project failed on two levels - it hired a fraction of the workers

  • the government had expected and it didn’t attract any of Apple’s hundreds of suppliers.

  • If an iPhone is to be made in the U.S., it’s more likely to follow the Brazil model, not

  • the Shenzhen model, which means far few jobs and for those workers, making for Apple would

  • be as seasonal as picking apples.

  • So while the U.S. could one day boast an iPhone "Assembled in America."

  • the question is, does it really want to?

Take a look at the back of any iPhone and you'll see a familiar phrase that's been printed

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