AMONG MULTINATIONAL FIRMS, Apple in particular has mastered the arts of tax, regulatory, and labor arbitrage. Through subcontractors, Apple employs Chinese workers to assemble most of its iPhones and iPads for wages and under working conditions that would be illegal in the US or any Western democracy. According to Konstantin Kakaes in MIT Technology Review, producing every single component of the iPhone in the United States, in addition to assembling it in the United States, would at most add $100 to the cost of the device.18 But while domestic production would not seriously inconvenience American consumers, American labor costs might cut into Apple’s profit margin, which in 2010 was 59 percent of the final sales price of its iPhone 4, with labor costs in China accounting for only 1.8 percent.19 In 2017, Apple’s iPhone X, which cost $357.50 to make and sold for $999, gave Apple a gross profit margin of 64 percent.20
To avoid taxation, according to a US Senate subcommittee in 2013, Apple has used a variety of tax arbitrage tricks, including the establishment of a subsidiary in Ireland