Jason Dedrick, Greg Linden, and Kenneth L. Kraemer broke down the cost of the iPhone and showed how China doesn’t get as much value from iPhone exports as we think.
So what about all of those famous factories in China with millions of workers making iPhones? The companies that own those factories, including Foxconn, are all based in Taiwan. Of the factory-cost estimate of $237.45 from IHS Markit at the time the iPhone 7 was released in late 2016, we calculate that all that’s earned in China is about $8.46, or 3.6% of the total. That includes a battery supplied by a Chinese company and the labor used for assembly.
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