Quote:
Originally Posted by fjtorres
Uh. No.
A lot of companies exist solely to market outsourced products; they provide the specifications, the brand, distribution and marketing, and their ODM *partners* supply the products.
http://en.wikipedia.org/wiki/Origina...n_manufacturer
No outsourcing, no company.
And if they can't sell the product at the outsourced price they can't exist either.
Vizio is the current poster child for a successful business built on this model.
So is Westinghouse Digital (no, they are in no way related to the Westinghouse that build nuclear reactors--that one is owned by Toshiba).
Note they have been making decent profits in a business where Sony is losing their shirt on (TVs) and even Samsung is struggling to make a profit.
This is not a black and white issue.
Modern manufacturing is a web of relationships, contracts, labor division, and wide-ranging supply chains. And every company's case is unique unto itself.
That is one reason why Apple found itself on the hot seat and felt compelled (and is able) to act; their relationship with Foxconn is decidely different than those of other Foxconn partners.
Pondering and debating is good but let's be careful not to over-generalize. |
In the end suppliers like Foxconn and brandowners like Apple are in the same boat. Foxconn would go belly up if Apple pulled all its orders, but Apple couldn't find anyone able to replace Foxconn.
So they both must react in cases like this. As I have mentioned, while the workers' situation was quite bad 20 years ago, but it is very favorable these days. But they must do something to counter the (though mostly unfair) bad publicity.
Companies like Foxconn, of course, work on minimal margins. Apple tells them where to buy the components and production equipment and then calculates overhead and assembly costs. In the end Apple and others will leave Foxconn a profit margin of about 3-5% maximum. So any increase in wages, etc must come through higher prices from Apple.