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Refurbished iPhone Industry In China
- Sep 11, 2018 -

On Saturday, local time, US President Donald Trump said that Apple should produce products in the United States to avoid being affected by tariffs.

Trump said in Twitter, "Apple's price may rise because of the large amount of tariffs we impose on China - but there is a simple solution that can be exempted from tariffs and even get real tax incentives. Your products are produced in the US, not in China. Start building a new factory now. Exciting!"

The day before Trump’s tweet was published, a letter from Apple to the US trade representative Robert Lightthizer was disclosed. The company said in the letter that Trump proposed to impose tariffs on imported US$200 billion worth of Chinese goods, which will affect Apple products such as Apple Watch, AirPods, Mac Mini and Apple Pencil.

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Bank of America Merrill Lynch said Apple may ask its partners to introduce some of the iPhone's assembly operations into the US in order to cope with Top's pressure. This is also the reason why the refurbished iphone industry is concentrated in Shenzhen, China. China has the most complete mobile phone spare parts resources, human resources, including logistics resources.

"It seems that the issue of 'returning to the United States' has been taken to Trump's agenda. We believe that Apple may ask Hon Hai and Pegatron to respond to President Trump's request. A small portion of their iPhone production is transferred to the United States," analyst Wamsi Mohan said in a research report on Monday entitled "Blocking the Risks of China's Trade and Driving the Potential of US Manufacturing." "The result is that the production of the iPhone (currently not affected by tariffs) (all assembly operations in the terminal process) will be transferred to the United States, which will require a 20% price increase to offset the increased labor costs." Globally refurbished iphone industry only Can concentrate on China.

Mohan said that according to the "most likely" option, Apple will transfer 10% of its iPhone assembly business to the US, and the average selling price of the iPhone will increase by 8%. He also said that if Apple transfers 50% or 100% of the iPhone assembly business to the US, iPhone prices will rise by 14% and 20% respectively.

The analyst did not talk about the possibility of the iPhone's more comprehensive production plant (non-assembly business) moving into the US because of higher labor costs in the United States. He pointed out that the wages of American workers are 2.6 times that of Chinese workers.


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