At the Santa Ana, Calif., headquarters of Rokform, a three-year-old phone accessory maker, there’s a 3-D printer sitting next to the lead designer’s desk, so that he can quickly turn out prototypes. In a nearby shop, a pair of $100,000-plus automated machines carves iPhone docking stations out of solid aluminum.
And when Rokform began delivering its latest product to Target stores last month – a $70 mount to attach a smartphone to a bike’s handlebars – owners Jeff Whitten and Craig Erion farmed out work to four other nearby shops, utilizing their similar machines to fill store shelves.
But when Rokform scrambled to churn out plastic protective cases for Apple’s new iPhone 5C in September, and Samsung’s Galaxy S4 earlier this year, it turned to China. Factories there had the phone dimensions ready to go, which offered a critical first-to-market advantage.
Rokform’s dual production models illustrate the manufacturing realities faced by many small companies. Keeping work close to home still makes sense, if an early-stage product needs lots of tweaking and monitoring by specialists, or if it involves heavy automation and little labor. Otherwise, it’s hard to compete with the countless manufacturing options and low wages in China – and, increasingly, even lower-cost countries such as Vietnam and Indonesia.
“We had to go over there,” Erion said. “We’d like to do it here, but sometimes we can’t.”
Consumers themselves are at least partly to blame for the decline. For all the talk about “Buy American,” most customers who see a row of iPhone or Android phone cases on the shelves of a big-box retailer are thinking only about quality and price, said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University.
Consumers “talk the talk, but when the time comes to open the wallet,” it doesn’t matter, Erion said.
Rokform grew out of Two Brothers Racing, a more than 20-year-old maker of motorcycle parts owned by Erion and Whitten. In the companies’ shared space in Santa Ana, Rokform makes phone accessories, and Two Brothers has a shop to form motorcycle exhaust pipes.
Rokform still makes some plastic phone cases for older model phones, such as the iPhone 5, at RPM Plastic Molding in Anaheim, Calif. There, machines melt plastic beads and pump the liquid into a cavity between two steel plates.
The operator of RPM’s machine can be paid as much as $12 an hour – a cost that still makes competition with China difficult.
“Where I can be competitive is the completely automated” jobs, RPM co-owner Mike Ferik said, pointing to another machine in his facility that was automatically dropping plastic parts for neck braces into a bin on the floor.
Ferik learned his trade at age 12, standing on a box in his dad’s shop. In 2002, he had to decide whether to close or change the way he did business. Creating those steel molding plates was no longer an option.
“Our customers demanded that we (lower) prices,” he said.
Now, instead of employing a handful of people with years of training in apprenticeships to understand what can happen with a machine that shapes steel, Ferik employs dozens who don’t need much training to pull a plastic case out of a steel mold. The mold is made in China.
Ferik’s customers appreciate the ability to have direct communication and, with a quick trip to Anaheim, check on the quality of the product.
“You never know what can happen” when products are made overseas, Ferik said.
In the case of Rokform’s phone cases, being first to market is critical. To see why, consider what happened to Irvine, Calif.-based Incipio, which was among the first to make a case for the iPhone in 2007 and consequently doubled in size each year for five years. By manufacturing offshore, the company was able to quickly expand into new product lines, ranging from wallets to batteries to speakers to bags.
It’s not just the little guys, said Peter Navarro, an economist at the University of California-Irvine and director of the documentary film “Death By China.” Apple, the giant under whose shadow Rokform lives, is responding to those same forces.
“What you’ve got is a microcosm of why the American economy is growing slowly,” Navarro said.