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Ascape Audio and the economics of making headphones in America

chinatopwin chinatopwin 2018-04-02 10:01:21
Ascape Audio's home page proudly proclaims "Designed in Detroit," but at this point it's not 
helping business.
"It hasn't made any goddamn impact," marketing director Dean Clancy said. "I want to put 
that in as many places as possible, because regardless of how it impacts our sales, I just want 
people to know we're doing it here," he said.

"Designed in Detroit" they may be, but economics makes manufacturing Ascape's earbuds in 
the Motor City impossible. President Paul Schrems estimated it'd take at least $5 million to 
build a factory and staff it, so the company has offshore-manufacturing contracts for the 
wireless earbuds it designs in the D. "These things I wanna make are not made here," 
Schrems told me recently.

Ascape's next project is the Ascend-2, a pair of earbuds with a twist-to-lock feature to keep 
them from falling out during a run or sweaty workout, promising better comfort and audio 
quality than the previous iteration. Like Apple's AirPods, they'll come with a case that doubles 
as a charger and extends battery life. "No [local] manufacturing partner is motivated to make 
something like that," he said.

Part of that is because Michigan, and the US in general, doesn't have a supply chain set up 
for making consumer electronics at scale the way it does automobiles. Components and raw 
materials have to be sourced offshore, and currently there's a dearth of talent required to 
oversee production and assembly once the injection molds start pumping out minuscule parts.

In a recent fireside chat, Apple CEO Tim Cook told Fortune that the reason Apple works with 
China is because the country's people excel in highly skilled tooling environments and labor-
intensive vocations. "In the US you could have a meeting of tooling engineers and I'm not sure
 we could fill the room," he commented. "In China, you could fill multiple football fields."

"It doesn't even make sense to do it over here anymore," Schrems said.

If the largest corporation in the history of the world can't build phones and earbuds in America, 
how can you expect a five-man team from Detroit to do the same?