Soaring labor costs caused by worker shortages and unrest, a strengthening Chinese currency that makes exports more expensive, and inflation and rising housing costs are all threatening to sharply increase the cost of making devices like notebook computers, digital cameras and smartphones.Panzica suggests that clothing costs could increase even more than that of electronics if they were manufactured in the US. For a device like the iPhone, he says, the majority of the cost is in the materials that go into it. But materials for shirts and pants are cheap the labor makes up a higher portion of the cost of production. iphone labor cost
The firm calculated that the iPhone 7 cost 219. 80 in BOM costs and tacked an additional 5 as labor costs to come up with a total manufacturing cost of 224. 80 for the phone. The phone retails for 649 in its starter version. For context, the same firm had calculated a total manufacturing cost of between 200 and 247 for iPhone 6 last year.
So if the materials cost roughly 188, and Dediu has calculated that an additional 93 is spent on manufacturing its smartphone, (a cost that includes the labor costs, transportation, storage and warranty expenses) we reach a total of about 281 to manufacture an iPhone that retails at 649. This represents a profit for Apple of 368 Apples estimated 319 profit per phone is at least 20 times the cost of producing the iPhone. In fact, because the labor cost is only part of Foxconns costs, which include energy, property, and its own profit, Apples profitiphone labor cost How can the answer be improved?
At the moment, the iPhone 5 costs between 650 850 retail. iPhones are mostly manufactured and assembled in China, famously by the company Foxconn. And Apple pays around 5 per iPhone for labor. And Apple pays around 5 per iPhone for labor. iphone labor cost This would imply a labor cost for an iPhone of about 12. 50. Though these estimates arent confirmed, a few intriguing observations can be made by the clues offered by ABCs tour. According to Dediu: The total bill of materials, or cost of the iPhone 7s components, add up to 219. 80, research firm IHS Markit said in a statement on Tuesday. The company estimated that actually building the iPhone 7 costs Apple 5, bringing its total manufacturing cost to 224. 80. The price applies only to the 32GB iPhone 7 and is based on preliminary Oct 22, 2015 Tech Industry Low wages, long hours persist at iPhone factory, says labor group. New Yorkbased China Labor Watch claims more work needs to be done to improve conditions at a supplierowned factory in Shanghai. In the ABC report the wage of workers on the line is given as 1. 78hr[4. 17 hours of labor input would imply 30 labor cost per iPhone. That seems a lot higher than the industry (i. e. iSupplys estimate is 8 for manufacturing cost. ) This is an upper bound. Obviously, those 17 hours could be spent in automated operations which were not