When President-elect Donald Trump commented on the campaign trail that he would get Apple (AAPL) to build its "damn computers and things" in the U.S. instead of overseas, it was widely regarded as a joke.
However, prospects of an American-made iPhone are now being taken a bit more seriously.
Apple has reportedly asked iPhone assemblers Foxconn Technology (FXCOF) and Pegatron Corp. to explore manufacturing the smartphones in the U.S., according to sources who spoke to the Nikkei Asian Review.
Foxconn and Pegatron produce more than 200 million iPhones annually out of their Chinese facilities. Apple is Foxconn's largest customer, accounting for more than 50% of its sales.
While Foxconn is believed to be investigating the possibility of establishing U.S. production facilities, its Chairman Terry Gou remained wary about the rise in production costs, the Nikkei reports.
There are numerous arguments for why the iPhone shouldn't be made on U.S. shores. Critics argue that a transition would be more difficult than expected and that production costs would skyrocket, causing iPhones to become unaffordable.
The total cost of manufacturing the iPhone 7 with 32GB of memory is about $225, which then is sold at retail for about $649, according to research firm IHS Markit. If iPhone production were moved to the U.S., the retail price could potentially more than double, resulting in a major case of sticker shock for U.S. consumers, said Frost & Sullivan analyst Brent Iadarola.
"Labor costs alone would contribute to a price point that would shock consumers and put Apple in an adverse competitive position," Iadarola said in an email. "...So despite the rhetoric, the 'end-to-end' iPhone will never be manufactured exclusively in the U.S."