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While Apple Is Criticized for Foxconn, Other Companies Are Silent

bits.blogs.nytimes.com

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Re: While Apple Is Criticized for Foxconn, Other Companies Are Silent

#3
As we are constantly reminded here, Apple takes 80% of the phone industry profits and thus deserve proportionate blame for working conditions.

They make $575 in profit from an iPhone but pay the Foxconn workers $7 to assemble it. They could double the pay and still make a very huge profit. On the other hand, many other companies like Amazon and Microsoft sell the hardware for a loss, hoping to make it up on software and media purchases.

Meanwhile, the other companies are not doing very well, and labor cost increases for them might put them out of business entirely and then the workers won't even have a job. HTC doesn't have $100 billion in the bank and recently reported a bad quarter. This is why Apple is criticized more since it has most leeway of all the companies mentioned in the article to increase wages.

Re: While Apple Is Criticized for Foxconn, Other Companies Are Silent

#4

As we are constantly reminded here, Apple takes 80% of the phone industry profits and thus deserve proportionate blame for working conditions. They make $575 in profit from an iPhone but pay the Foxconn workers $7 to assemble it. They could double the pay and still make a very huge profit. On the other hand, many other companies like Amazon and Microsoft sell the hardware for a loss, hoping to make it up on software…

$575 profit per iPhone? I think you mixed up profit with something else, maybe average sale price.

In a free market, profit isn't determined by cost or your intuition about "fairness". Price is determined by supply and demand, and profit is price minus cost.

Foxxconn already pays well above average wages while providing a safer workplace than the average US manufacturer, and a lower suicide rate than the Chinese average. And this is still going up even as working hours decrease.

Whether all these criticisms are completely legitimate or not (for example I think workers should be allowed to work more overtime if they voluntarily choose to, to get more money, instead of being capped at 49hours/week), Apple is responding to them as well as anyone could ask for.

Apple's competitors are not getting the same scrutiny. Since Apple is handling the issue great, isn't there room for some of that attention to land on others with much worse practices?

Further, Apple has nowhere near 80% of the production or employees or anything like that. There are other big players as far as how many Chinese workers they are involved with, which I think is the relevant metric for how important reform is.

Re: While Apple Is Criticized for Foxconn, Other Companies Are Silent

#6

As we are constantly reminded here, Apple takes 80% of the phone industry profits and thus deserve proportionate blame for working conditions. They make $575 in profit from an iPhone but pay the Foxconn workers $7 to assemble it. They could double the pay and still make a very huge profit. On the other hand, many other companies like Amazon and Microsoft sell the hardware for a loss, hoping to make it up on software…

That $575 number is nonsensical; the iPhone 4S (the most expensive model) costs $599 off-contract. These phones do not cost $25 to make. The real number is somewhere around $300, most of which paid by the carrier: http://www.asymco.com/2012/02/26/iphone-sine-qua-non/.

Regardless, doubling the pay for workers does not solve the real issue here. Their wages are already above average for Chinese factory workers in that area. If you want these workers to be paid a first-world wage, that's a much larger issue than how much Apple pays their final assembly workers.

Also, Foxconn does not build just phones. It's used by most desktop and laptop manufacturers, where Apple is certainly not in the lead, and to assemble all game consoles, where Apple doesn't even have products. Microsoft, for example, is responsible for the workers in the incident mentioned here: http://kotaku.com/5874706/report-mass-suicide-threats-at-xbo... (I don't think Microsoft would have an issue paying more, for example.)

Now this is not to underplay the problems in Chinese manufacturing, of which there are many. But Apple is certainly not singularly able to make any changes here.

Re: While Apple Is Criticized for Foxconn, Other Companies Are Silent

#7

As we are constantly reminded here, Apple takes 80% of the phone industry profits and thus deserve proportionate blame for working conditions. They make $575 in profit from an iPhone but pay the Foxconn workers $7 to assemble it. They could double the pay and still make a very huge profit. On the other hand, many other companies like Amazon and Microsoft sell the hardware for a loss, hoping to make it up on software…

$575 profit per iPhone? I think you mixed up profit with something else, maybe average sale price. In a free market, profit isn't determined by cost or your intuition about "fairness". Price is determined by supply and demand, and profit is price minus cost. Foxxconn already pays well above average wages while providing a safer workplace than the average US manufacturer, and a lower suicide rate than the Chinese aver…

>$575 profit per iPhone? I think you mixed up profit with something else, maybe average sale price.

The number is from the usual suspect Asymco.

http://www.asymco.com/2012/04/02/android-economics/

>Whereas Android generates $1.70/device/year and thus an Android device with a two year life generates about $3.5 to Google over its life, Apple obtained $576.3 for each iOS device it sold in 2011[4]. The economics of Android are nothing like the economics of iOS.

Re: While Apple Is Criticized for Foxconn, Other Companies Are Silent

#8

As we are constantly reminded here, Apple takes 80% of the phone industry profits and thus deserve proportionate blame for working conditions. They make $575 in profit from an iPhone but pay the Foxconn workers $7 to assemble it. They could double the pay and still make a very huge profit. On the other hand, many other companies like Amazon and Microsoft sell the hardware for a loss, hoping to make it up on software…

$575 profit per iPhone? I think you mixed up profit with something else, maybe average sale price. In a free market, profit isn't determined by cost or your intuition about "fairness". Price is determined by supply and demand, and profit is price minus cost. Foxxconn already pays well above average wages while providing a safer workplace than the average US manufacturer, and a lower suicide rate than the Chinese aver…

>> [Foxconn provides] a safer workplace than the average US manufacturer

Would really love to see some data that backs up that assertion.

Re: While Apple Is Criticized for Foxconn, Other Companies Are Silent

#9

Earlier quoted context omitted.

$575 profit per iPhone? I think you mixed up profit with something else, maybe average sale price. In a free market, profit isn't determined by cost or your intuition about "fairness". Price is determined by supply and demand, and profit is price minus cost. Foxxconn already pays well above average wages while providing a safer workplace than the average US manufacturer, and a lower suicide rate than the Chinese aver…

>$575 profit per iPhone? I think you mixed up profit with something else, maybe average sale price. The number is from the usual suspect Asymco. http://www.asymco.com/2012/04/02/android-economics/ >Whereas Android generates $1.70/device/year and thus an Android device with a two year life generates about $3.5 to Google over its life, Apple obtained $576.3 for each iOS device it sold in 2011[4]. The economics of Andro…

That's revenue (gross income) not profit (net income). Look at the charts on that article, they say all "revenue", the article is about revenue.

Apple has an ASP on iphones on the order of 650 and a profit margin on the order of 40%. They can't be making 575 profit per phone.

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