iPhone Supply Chain Highlights Rising Costs in China

Tuesday Jul 6th 2010 by Datamation.com Staff

Chinese labor costs have risen 50 percent since 2005, leaving factories scrambling for ways to reduce costs.

NY Times: According to experts who analyzed the iPhone 4, the components that make up the latest Apple device cost about $187.51. Labor costs to assemble the phone only account for about 7 percent of its total price.

However, Chinese labor costs are rising--up 50 percent since 2005. In addition, a rising currency and inflation are also increasing costs at Chinese electronics factories. In response, the factories are considering re-locating to less expensive parts of China.

“Electronics companies are trying to figure out how to deal with the higher costs,” says technology analyst Jenny Lai. “They’re already squeezed, so squeezing more costs out of the system won’t be easy.”

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