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The iPod Is Built Globally, But The Money Is Made In The US
from the world-music dept
Over at The New York Times, economist Hal Varian discusses a recent study that looked at the various countries involved in making an iPod. Not surprisingly, a large chunk of each iPod goes abroad, as companies in different countries are involved with its production, either as parts suppliers or manufacturers. The study is useful in showing the difficulty in measuring trade statistics, although the authors conclude that each iPod sold contributes $150 to the US trade deficit with China. Andy Kessler actually took up this exact issue a few years ago, examining the link between the iPod and the trade deficit. The key thing to realize is that while Apple receives a fairly modest cut of each iPod sold, it's by far the most profitable chunk. The money made by the various chip makers and assemblers commands the low margins that are typical for their industries. Thus, while you could blame Apple for causing so many dollars to leave the US, you have to figure in the company's exploding stock price post-iPod. When the iPod was launched in October, 2001, the company's market cap was less than a tenth of what it is now ($105 billion). So any contribution to the trade deficit that the company might be responsible for is more than compensated by the $90+ billion that it's added back to the US economy.
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Reader Comments (rss)
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"Proudly designed in California, Made in China"
Somebody please explain little Joe how clueless he really is...
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We're global, baby.
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I'm no mercantilist
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The Future of the US Economy
I went to school and got an engineering degree but I would never make that mistake again. Law school is the way to go.
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Re: The Future of the US Economy
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Now really....
So any contribution to the trade deficit that the company might be responsible for is more than compensated by the $90+ billion that it's added back to the US economy.
How much of that that $90 billion being added back to the US economy and how much ends up in some executives bank account to insure that no one in his family line never has to work again?
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Re: Re: The Future of the US Economy
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What I hate to see, is Government's like China's reaping the rewards instead of their people.
If I would have thought of going to the next World Olympics, I would certainly change my mind considering that China more or less just threw the entire town out of their houses so they could 're-build' it to look 'good'. It's a farce.
I would have RATHER went to the run down town and met with REAL Chinese. Not these mannequins the Chinese government will put out all 'dollied' up.
As for the people of the world, it's good to see jobs and such go to them. If the government's would just back off and allow people to entertain their own ambition the whole world would be such a better place.
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What About Creative Zen?
The iPod is made in China.
The Zen is made in Malaysia. The Zen is better quality and doesn't break when dropped like the iPod does.
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Where is that $90 Billion
The "capitalized" value of a company never "puts money in the economy". It is nowhere near the amount of money that could be "put into the economy" even if all of the stock was sold. The price drops as it sells and to top it all off, the "exchange" between owners means that money is being taken out of the economy to buy the stock.
The economy is based on the purchase of consumables. Whereas, stock represents the ownership of a company. They are not the same thing.
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iPod stuffs as gift.
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iPod stuffs as gift.
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Opinion
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