Hacker News Reader

Comment by educar | Hacker News Reader

You make it sound like Apple can easily move out of China. Think again. Apple's profits are largely due to the cheap labor market (just like many other companies)

View on HN

Their point is that chinese costs are rising fast. OTOH they're probably underestimating the difficulty of moving outside China, not because of the supply chain.

This is simply false. The difference in labor cost makes only a small difference to Apple's profits.

The benefit to Apple of being in China is the responsiveness of the supply chain.

> Apple's profits are largely due to the cheap labor market (just like many other companies)

Foxconn is replacing millions of workers in China with robotics. Couldn't Apple acquire these same robotics, perform their own manufacturing in the US (remember, substantial tax breaks in the US for equipment purchases!), and then lease out any spare capacity.

Seems its all coming back to US shores. As a US citizen, I don't mind.

Not really since all the components that actually make the phone are also made in China.

Not so, the chips and display are made in Korea, Taiwan or Japan.

Won't let me reply to you, but really if you're making it in the US, Japan, Korea, Taiwan are the same thing as China.

>., Japan, Korea, Taiwan are the same thing as China.

Hahahaha nope.

Great contribution. You must feel pretty good about yourself.

None of the complicated components are made in Red China. The CPUs are made in Korea, the cameras in Japan, the batteries in Japan, and the power control circuits in Free China, The CNC machines, and glass cutting instruments are made in Germany and the USA. The software is American as motherhood and apple pie.

Red Chinese fingers do the final assembly and Red Chinese tax laws provide loopholes but iPhones are not a Red Chinese product.

because rapid destabilization and shifts in the job market have never had far reaching international consequences

I believe Apple, unlike most companies that contract manufacturing to places like Foxconn, actually owns most, if not all, of the equipment inside the Foxconn facilities. If what I've read is correct, Apple is completely responsible for setting up the actual assembly lines as well. Foxconn essentially just provides the factory space and the labor.

I've also heard that Apple is the largest purchaser of CNC machining equipment in the entire world.

I'm curious to know how many years away we are from robotics being able to complete the final assembly of small electronics at the same speeds and low prices as humans and what affect this will have on countries like China that rely heavily on low cost factory labor.

Terry Gou, CEO of Foxxcon, predicted back in 2015, that in 3 years they would be able to complete 70% of it's assembly line work by robots.

I wonder what the remaining 30% is. It seems to me that the most delicate work is the stuff you want to automate the most to lower defects. The less delicate work can be done by humans. But the less delicate work should also be the most easily automated?

From my understanding the final assembly of components into the finished product is still the most delicate/demanding and is still primarily performed by humans.

What you say makes perfect sense that this is in many ways the part of the assembly process that would gain the most benefit from automation but is probably the most difficult to automate.

I'm really curious to see how fully automating this process would change the globalized manufacturing industry. Would Apple move more manufacturing stateside or would there be a new rush to move manufacturing to countries with the lowest energy costs and tax burden. And are these countries typically the same as those offering cheap labor right now.

Does anyone know how China stacks up in terms of costs once you remove the labor component? Are energy and taxes low as well? I imagine environmental/regulatory costs are quite low.

> You make it sound like Apple can easily move out of China.

And you make it sound like cheap labor only exists in China.

Reply on news.ycombinator.com