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Making The iPhone In US Would Decrease Apple's Profits By 50 Per Cent

A new study has revealed the amount of the hard cash that Apple is saving, by sending its money overseas, for its iOS devices to be manufactured there.

If Apple would decide to keep the money in the US economy, and to move its massive operations home, the company would lose a quarter of its profits from these products - according to a study, published by Manchester's Centre for Research on Socio-Cultural Change.

While Foxconn is taking care of the iPhone and iPad assembly, the average production cost is $178.45 (about £110) for a device that sells with an average cost of $630 (£390). This means that Apple's gross margins are about 71.7 per cent. Here, the labour costs are almost insignificant, about $7 for each device.

Assuming that Apple would ever decide to stop sending money to the Asian economies and keep the business in the US, the financial situation would change completely.

Instead of paying taxes overseas, Apple would have to pay US wages and to comply with the labour legislation in America. In this case, the total production cost would rise to $337 (£209) which would lower Apple's gross margin to 46.5 per cent.

Source: Cresc UK (opens in new tab)

Radu is the founder of, and has worked as a freelance writer for ITProPortal, as well as having been blogging around since 2004. He is interested in anything Apple as well as gaming and mobile applications.