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It takes three days, on average, to get a store in San Francisco, some 6,300 miles away.ĭiffering Prices IPhones can sell for nearly 20 percent more in China than in the United States.Ĭhinese customers can pay much higher prices, because of currency fluctuations and the country’s hefty value-added tax.Ī 32-gigabyte iPhone 7 sells for about $776 at the Apple Store in Shanghai. Because the vehicles have about $27 million worth of freight on board, they are equipped with cameras and sometimes accompanied by armed security guards.Īfter the iPhone leaves the Foxconn factory in Zhengzhou, it takes two days, on average, to get to a store in Shanghai, a 590-mile trip. A single tractor-trailer holds up to 36,000 iPhones. Domestic-bound iPhones are typically loaded onto a large truck and taken on an 18-hour drive from Zhengzhou to Shanghai, in eastern China, where Apple has set up its national distribution center. Afterward, the goods are approved for transport around China. Once the products are declared an import, customs can collect a 17 percent value-added tax, a kind of national tax, based on the import price. There, they refuel, before going on to Louisville, Ky., a major logistics hub, or other points in the country.įor an iPhone headed for the China market, customs officials use an electronic system to virtually stamp the goods as “exports” and then restamp them as “imports.” In Zhengzhou, the process happens in the same customs facility just outside the factory. A single wide-body Boeing 747 can easily carry 150,000 iPhones tucked into its aluminum canisters.įrom Zhengzhou, UPS, FedEx and other freight carriers typically fly United States-bound iPhones to Anchorage. Smartphones are small enough to be shipped by plane in huge quantities - and cost effectively. Some years ago, personal computers that were made in China were transported to the United States by container ship, with a trip lasting about a month. The airport has been significantly expanded in recent years, as production of the iPhone has increased. IPhones bound for the United States and other parts of the world leave customs by truck and are transported three miles to the Zhengzhou airport. Shipping Abroad Smartphones travel in Boeing 747s.
The process, most of which takes place electronically, allows Apple to assign a portion of its profits to an affiliate in Ireland, a tax-advantageous locale. In Zhengzhou, often in the customs facility, Foxconn sells the completed iPhones to Apple, which in turn resells them to Apple affiliates around the world.
The customs operation sits in a so-called bonded zone, which allows Apple to sell the iPhones more easily to Chinese consumers.Īs the final point of assembly for the iPhone, China also serves as a starting point for Apple’s global tax strategy. The newly assembled iPhone is transported a few hundred yards beyond the factory gate, where China built a large customs facility. Passing Through Customs A government customs facility sits just outside the Foxconn factory.
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