Apple Supports 4.8 Million Jobs in China, More Than Double US Total
Apple Inc. (NASDAQ: AAPL) announced Friday morning that it will invest more than 3.5 billion yuan (about $506 million) to establish research and development centers in Shanghai and Suzhou, China. But the most interesting bit in the announcement comes in the boilerplate at the end of the press release: “Apple has created and supported 4.8 million jobs in China …” (thanks to Google Translate). That’s about 2.5 times the number of jobs the company claims to have created and supported in the United States.
At the end of 2015, Apple claimed it was “responsible for creating and supporting 1.9 million U.S. jobs.” Most of those — 1.4 million — “are attributable to the iOS ecosystem.” The company said it directly employs more than 76,000 people in the United States, or “nearly two-thirds” of the company’s worldwide workforce. Apple reported it had 116,000 employees worldwide at the end of its fiscal year in September 2016, and a story in The New York Times published last November cites an Apple statement that it has created “over two million jobs” in the United States since the iPhone was introduced.
This morning’s press release also claims that Apple has “created and supported” 1.8 million iOS ecosystem jobs in China and that the company employs more than 12,000 people in its 22 Chinese offices and 46 Apple Stores.
The difference between the number of jobs Apple claims responsibility for in China and the United States is due primarily to its manufacturing contract with Taiwan-based Hon Hai Precision Industry, better known as Foxconn, which has the capacity at its mainland plant in Zhengzhou to assemble half a million iPhones every day.
Foxconn employs about 1.2 million people, most of whom work assembling iPhones. However, the company also has begun an automation program that it expects to result in building about 30% of its iPhones with robots by 2020. The company replaced 60,000 workers with robots last year in a first phase of the long-term plan.
The Taiwanese firm also has said it is considering moving some production to the United States but has not offered any specifics. That would add about $30 to $40 to Foxconn’s cost of assembling an iPhone, according to a report from Bloomberg News. In China, assembling an iPhone adds about $10 to the cost.
If Foxconn is going to automate its iPhone production in China, it follows that if it were to set up a manufacturing facility in the United States the company would choose to automate that facility from the start. There would be no point in hiring thousands of people to build iPhones that could be more cheaply built by robots.
Apple’s supplier list for 2016 names its top 200 global suppliers. There are dozens of suppliers from greater China (mainland, Hong Kong and Taiwan), many with more than one location. These likely account for about half the 4.8 million jobs that Apple claims it created and supported in China.
Excluding the 1.4 million iOS ecosystems U.S. jobs and the direct U.S. jobs Apple created and supported, the company could be indirectly responsible for another 500,000 to 600,000 U.S. jobs. That’s a far cry from the 2 million or so Apple has created in China.