Placed in Jayme's Blog
Would you pay $1,150 for an iPad 2? Probably not. But that’s about what it would cost to manufacture it here. After I wrote my last post about American manufacturing, I decided to do some more research about potential costs that we would incur if our favorite products were manufactured in the good ol’ US of A. I found some interesting content about Apple’s iPad and the Chinese labor force. Apple has chosen to manufacture the iPad in China and we all know why… because Chinese have the lowest wage rate. We are able to produce products for much cheaper there, even after shipping costs. Many Americans, when surveyed, say that they would be willing to pay much more (sometimes north of 2x the price) for a product if it were made in the USA. However, when it comes down to it… we won’t. It has been proven time and time again through consumer purchasing models. If you have two identical products, one from China @ $4 and one from the US @ $4.50… nine times out of ten the consumer will purchase the product for $4. It’s not that we’re un-American or communists, rather that we are cost conscious consumers. Apple is slated to release the iPad 3 this Wednesday, March 7th, so what do you think you’d do. Fork over $1,200 for a made in the USA tablet or opt for the $500 Chinese manufactured iPad? My guess is the latter.
Check this out…
So, according to iSuppli, the manufacturing costs (in China) are about $10 per iPad. If it were manufactured here, $10 would turn into $292… bringing down Apple’s gross profit 15-20%. What would you do…?