What iPhones cost to make

[SeaKing]

Originally Posted by HansTWN

There have been some negative comments about Apple here, no doubt. But is it "bashing" when the critical remarks are right on the money?

From an objective point of view the only company that really does get bashed in this forum is Microsoft.

And just you wait until Microsoft has a mobile tablet/reader for us to jump up and down on top of and scream about. Then the drums will roll, the trumpets will blare, and we will put on warpaint and chant "expletives deleted."

I wonder if there are any Microsoft fan-boys lurking about to come to MS's defense?

[Kumabjorn]

Anything wrong with fan-girls?
I used to like Microsoft, well Windows to be more exact. I liked that there was a plethora of PC makers to choose from. The same goes for Android today. What I have never liked are proprietary solutions, that is why I don't like the iPhone, or to be more precise, that is why I won't buy an iPhone. The proprietary connector is a deal breaker for me, even if it technically is superior to a micro USB.
Lots of Japanese PC makers also produced gadgets with proprietary connectors and cables, hence they lost out to Taiwanese makers.

[elcreative]

Originally Posted by TheOmegaZoid

Its not a question of hate or insults. Its merely a comment trying to point out the cult like devotion to one company that these products inspire.

This thread is about the costs of creating the iPhone. Why not just step back a minute to examine the human costs and let that sink into our collective idol worship mentality.

I think people who criticize 'fanboys' instinctively find idol worshiping abhorrent in some way because of its obvious effects upon society.

For someone preaching against the evils of gadgets (especially later in the thread), you do so in a curious place - on a forum devoted to Mobile Reading (using electronic gadgets)... and you do support the "hate" culture rather than reasoned discussion if you don't see the problem with "fanboi" and also criticise only Apple for the use of various Chinese companies as if they are the only company having their goods manufactured in China... still mustn't let facts get in the way of anti-capitalist rhetoric, better to go for state control for the people... it worked really well for the USSR... so well that China is now heavily Capitalist as well...

[HansTWN]

Originally Posted by TheOmegaZoid

The way you describe it it sounds like a Chicago economist's paradise. A naturally evolving market, plenty of work and enough cash if you're prepared to work hard. Sadly the reality is a little different. Folks in China work hard and grab as much overtime as possible because they have no other choice, as their salaries are not enough to feed their families and buy a status phone.

You really have a rather slanted view, that is not based on any real observation, but just on some reports you read on some websites.

In China, the first question of workers applying for a job has always been "do you have overtime"? Over the past 20 years, however, the answer they expect has changed. 20 years ago they were hoping for "yes, we work plenty of overtime", that way more money could be made.

But now we are looking at the generation of the "little emperors". Single children, that were coddled by their parents. Hard work is not on the menu. They would rather have more free time than more money. The $500.- I gave is without overtime.

Forget your Dickensian horror scenarios, not that they don't exist in China at all (some small local companies still ride their employees real hard, probably turning out the $70.- tablets and other ultra-cheap items), but not at big companies working for international brands. Those are under constant scrutiny, they couldn't do that even if they wanted it. Besides, do you really think that a company like Foxconn wouldn't want to hire workers that are motivated, skilled, and work hard? Could the cheapest of the cheap workers even function in such an environment?

[MikeOxlittle]

Fits into the 5:1 ratio of MSRP to CoM (cost of material) which seems to be an industry standard in the hi-fi audio world.

I suspect that a lot of commercial goods on the market have a similar ratio although you have the occasional items like the Kindle or Xbox360, who actually lose money on the item but make it back in the accompanying 'software'.

[TheOmegaZoid]

Originally Posted by HansTWN

You really have a rather slanted view, that is not based on any real observation, but just on some reports you read on some websites.

In China, the first question of workers applying for a job has always been "do you have overtime"? Over the past 20 years, however, the answer they expect has changed. 20 years ago they were hoping for "yes, we work plenty of overtime", that way more money could be made.

But now we are looking at the generation of the "little emperors". Single children, that were coddled by their parents. Hard work is not on the menu. They would rather have more free time than more money. The $500.- I gave is without overtime.

Forget your Dickensian horror scenarios, not that they don't exist in China at all (some small local companies still ride their employees real hard, probably turning out the $70.- tablets and other ultra-cheap items), but not at big companies working for international brands. Those are under constant scrutiny, they couldn't do that even if they wanted it. Besides, do you really think that a company like Foxconn wouldn't want to hire workers that are motivated, skilled, and work hard? Could the cheapest of the cheap workers even function in such an environment?

Look, you view China in an idealistic way. Its a known fact that Foxconn offered the cheapest price because it got its workers not from the cities but from rural areas and then trained them up. Of course they want as much overtime as possible, of course they're willing to work hard.... because as I said, they don't have a choice. Since everyone wants the overtime its expected and so Foxconn naturally takes advantage of that.

When Apple says they're going to release an Iphone 5 on a certain date, the factories go into overdrive, with workers taking on two sometimes three shifts in a row without rest. For a lot of these people this is the only game in town if they want to make some money.

As for the 'little emperors' you talk about, they will not be found in computer factories and represent a very small portion of the population.

[TheOmegaZoid]

Originally Posted by elcreative

For someone preaching against the evils of gadgets (especially later in the thread), you do so in a curious place - on a forum devoted to Mobile Reading (using electronic gadgets)... and you do support the "hate" culture rather than reasoned discussion if you don't see the problem with "fanboi" and also criticise only Apple for the use of various Chinese companies as if they are the only company having their goods manufactured in China... still mustn't let facts get in the way of anti-capitalist rhetoric, better to go for state control for the people... it worked really well for the USSR... so well that China is now heavily Capitalist as well...

I'm against the lusting after and worship of objects at the expense of human values and morality. Yes.

I'm most certainly against globalization and the cruel realities it creates for people. Yes.

Its easy for the victorious in this economic world we live in, to claim that their system is the most ideal above all others, and claim superiority to all past history. Certainly.

[TheOmegaZoid]

Originally Posted by SteveEisenberg

While production cost is a factor, Apple's success requires being able to bring new features and designs to market quickly. If you have read your James Fallows, you know that this, rather than wages -- which are quickly rising -- is China's real competitive advantage in making these gadgets.

So, factually, I doubt your claims. No serious student of the Chinese business cycle blames Apple. The democratic alternative to globalization is the old Indian socialism. Import controls meant that only a few of the rich could afford the lousy local automobiles, while the peasants starved. But in as much as pressure from your side of the fence reduces labor exploitation, people saying what you say, however mistaken, may do some good.

Yes I know. We all know why Apple set up in China. Because its the place where the infrastructure allows for assembly of devices with a variety of differing parts that each need specialized factories or manufacturing techniques. So yes involved designs can be assembled faster there.

However, the alternative to globalization is not 'old Indian socialism'. Its non globalization or lets say ethically controlled global trade. Gosh kind of reminds me of the Opium wars a little bit. So in that case the British were exporting from China but this upset their balance of trade, so they came up with the perfect solution. Why not sell Opium back to the Chinese, and as they get addicted to it, the balance will be assured. Britain gets the materials and goods it wants, and the Chinese... well let them eat cake, (or opium in this case) as far as the British were concerned. Eventually an invasion was needed to maintain this order of affairs, and this was accomplished with brute force. (Can you blame the Chinese for disagreeing with western policy these days after what happened?)

But wait, what if they'd thought of something even better! How about getting the Chinese to grow the poppies themselves and then sell it back to them as opium for huge profit. Control of the economy, and no invasion needed! Of course Opium is a narcotic, but in a way Apple has managed through intense advertising and clever software to make their products something of a narcotic as well. China's the largest market and the holy grail for them so they use aggressive lawsuits to destroy any imitators and create a myth around their product. Now the Chinese have been organized by such supply masterminds as Tim Cook , to mine the materials, assemble the dirty batteries, and create the device. And then the devices can be sold back to those workers for massive profit. And soon the Chinese are locked into a binding relationship by international laws dictated from the World bank and so forth, from which they cannot escape.

This my friend is why globalization fails, because it will naturally favor the strongest party in the world. The law maker, the ones with the army to back up and maintain 'stability'.

There should be an alternative to this. In the Opium wars, the British should not have been allowed to invade, when the government complained. And of course if they hadn't their business would have failed because it would be revealed as faulty and unethical.

Gosh even when China trys to claim its rightful territory and stewardship over the surrounding waters, the cabal of western mafia nations won't let them and encircle them with military threats. So backed up by an unfair system, American companies like Apple are pirates, plunderers, the new opium traders ....for the new century!!

[murraypaul]

<skip rant about the Opium trade>

Do you actually have something relevant to say?
I know there are a lot of people who don't like Apple, but it is a new high to equate them to the British Opium wars!

[TheOmegaZoid]

Originally Posted by murraypaul

<skip rant about the Opium trade>

Do you actually have something relevant to say?
I know there are a lot of people who don't like Apple, but it is a new high to equate them to the British Opium wars!

The opium trade is a great example because it illustrates the beginning of globalization. Obviously its come a long way from that, but Apple is just one of many companies who take advantage of the current world order to make giant profits. Sure its not quite as downright nasty as war profiteering but it is distasteful. Of course if they couldn't leverage international laws to crush competitors, the Chinese would soon create their own phones and have no need for Apple's business, the price of Apples products would rise, and so people wouldn't buy it. Like the opium their business model would be shown to be flawed and disappear. Besides looking at the way 'fanboys' line up for their glass and colors, it wouldn't be hard to compare iPhones to opiates!!

So what I say is totally relevant and on the topic of the thread. For the iPhones cost is more than just a bill of materials.

[Prestidigitweeze]

As difficult as it is to watch people get beaten up verbally, and as much as I'd like to root for you, OmegaZoid, I have to ask: You do realize this isn't a political forum, don't you? If others on this thread began extolling the virtues of Milton Friedman and castigating Noam Chomsky, that, too, would be outside the comfort zone of this thread.

People can't just presume that inhumane work conditions in China are entirely about Apple because the company is ridiculously successful. If conditions are inhumane in other outsourced factories, then all of it should be addressed, don't you think?

I like Samsung's products, but they've been accused of as much exploitation as Apple and they're not American. Buying a Galaxy S3 is fun for the user, but it's not a de facto stand taken against the exploitation of Chinese workers.

And it's strange to hear you talk to Hans as if he doesn't understand the country in which he lives.

I'd still like to see a comparison of smartphone manufacturing costs that included all the major companies.

[SteveEisenberg]

Originally Posted by TheOmegaZoid

And then the devices can be sold back to those workers for massive profit.

Damn those little emperors. HansTWN says that they won't work hard like their parents.* And you apparently fear they will soon be addicted by Apple's "intense advertising and clever software."

Considering that all countries will always have problems, I think the little emperor and consumerism problems are the kinds of problems we want to have.

Originally Posted by TheOmegaZoid

Gosh even when China trys to claim its rightful territory and stewardship over the surrounding waters, the cabal of western mafia nations won't let them and encircle them with military threats.

Japan is a western mafia nation?

The Senkaku/Diaoyu Islands controversy just doesn't fit your US/UK-the-exploiters model. The attempt to turn even the unlikeliest news story into another piece of evidence for your POV does not help your argument.

Given current device choices, are you against mobile reading? And what kind of computer are you using right now?

____________________
* My interpretation of this from #94: "But now we are looking at the generation of the 'little emperors'. Single children, that were coddled by their parents. Hard work is not on the menu. They would rather have more free time than more money."

[TheOmegaZoid]

Originally Posted by SteveEisenberg

Japan is a western mafia nation?

The Senkaku/Diaoyu Islands controversy just doesn't fit your US/UK-the-exploiters model. The attempt to turn even the unlikeliest news story into another piece of evidence for your POV does not help your argument.

Are you against mobile reading? And what kind of computer are you using right now?

Absolutely Japan is now an ally of the west kept under tight leash since WW2. Taiwan is allied to the west and serves as Americas check on China dominating the South China sea. All the smaller nations in SE Asia are in line with US policy on China containment. Haven't you followed the news lately? The western press is constantly filled with criticism of China and characterizations of it as an aggressive potentially dangerous nation. Japan doesn't have any claim to the Diayu islands, any more than it has a claim to ManchuGuo or Taiwan. Admittedly this is a small piece of territory to argue about, but its symbolic for China and representative of how they've been treated by aggressive empires, near and far.
____________________

[HansTWN]

Originally Posted by TheOmegaZoid

Look, you view China in an idealistic way. Its a known fact that Foxconn offered the cheapest price because it got its workers not from the cities but from rural areas and then trained them up. Of course they want as much overtime as possible, of course they're willing to work hard.... because as I said, they don't have a choice. Since everyone wants the overtime its expected and so Foxconn naturally takes advantage of that.

When Apple says they're going to release an Iphone 5 on a certain date, the factories go into overdrive, with workers taking on two sometimes three shifts in a row without rest. For a lot of these people this is the only game in town if they want to make some money.

As for the 'little emperors' you talk about, they will not be found in computer factories and represent a very small portion of the population.

May I recommend checking out a few facts before you write?

1.)Little emperors --- I suggest you read up on the "one-child policy". Due to this policy virtually ALL children are single children. This policy has been rigorously enforced over the decades, and only ethnic minorities (which account for only around 5% of the population) were exempt. It has been only slightly loosened over the last few years, still not nationwide. That means, basically, that every worker is a "little emperor", except the old ones.

2.)Workers from rural areas --- Did you know that Shenzhen and Dongguan were little fishing villages up to the mid 80s? Dongguan went from 80,000 to several million, all temporary immigrants from other provinces. Did you know that the number of workers in the factories in Guangdong exceeds the number of the original inhabitants? So yes, all the workers came from rural areas. What is wrong with that? That is how it worked everywhere in the world. People in rural areas looking for work in the cities --- how "awful". And the workers have money to send home to their families in rural areas, "disgusting"!. The workers from rural areas, 18-22 when they start out, are far away from the strict parental supervision and, believe it or not, like young people in the West like to party and not work around the clock. Worker in general now prefer not to work overtime. Obviously some would rather have more money, it takes all kinds, same as elsewhere.

3.)And that despicable Foxconn, working overtime right now to get rush orders out so that their customers have products before the Christmas rush. Shame on them. I guess their management should be stoned for ordering some overtime during the most busy times of the year? Well, dumb as I am, I don't see what else they could do and what is so wrong with that. Perhaps you could enlighten us?

4.)And I have more news for you. No company likes to work overtime. You have to pay 50 to 100% extra, that is extremely expensive. So companies avoid it like the plague and only do it when it is absolutely necessary.

5.)Is Foxconn cheaper than other suppliers? Yes, probably. Do they pay less? Definitely no. They wouldn't find any workers, especially good ones, if they did. They have economies of scale (they will pay less for supplies, machinery, they will be more efficient), they have a well thought out workflow, they have a great system of training and managing. Workers see opportunities for advancement and work hard to try to get ahead. I know that sounds sinister to you. Workers working for their own benefit, mind-boggling, isn't it?

6.)"The only game in town to make some money". Boy, I never laughed so hard. You will find tens of thousands of factories within an 2-3 hours drive from each other. You just have to walk to the factory gate next door and they will take you. The vast majority of factories are desperately looking for workers.

[HansTWN]

Originally Posted by TheOmegaZoid

Absolutely Japan is now an ally of the west kept under tight leash since WW2. Taiwan is allied to the west and serves as Americas check on China dominating the South China sea. All the smaller nations in SE Asia are in line with US policy on China containment. Haven't you followed the news lately? The western press is constantly filled with criticism of China and characterizations of it as an aggressive potentially dangerous nation. Japan doesn't have any claim to the Diayu islands, any more than it has a claim to ManchuGuo or Taiwan. Admittedly this is a small piece of territory to argue about, but its symbolic for China and representative of how they've been treated by aggressive empires, near and far.
____________________

The UN gave the Senkakus/DiaoYuTai to Japan after WW2. And the way China was being treated in the 19th century is the way they treat their neighbors now (Taiwan, Tibet, Mongolia, Philippines, Vietnam, Malaysia). China is the last great colonial power.