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Why the iPhone is made in China

Why the iPhone is made in China

There’s been a lot of talk about the New York Times article on why Iphones are made in china.

If you haven’t read it, you can find the article here.

I was reading comments on Slashdot and it was apparent that most of them didn’t read the article. They assumed it was all because of “cheap labor”.

According to the article, it has more to do with the type of expertise that is readily available there – lots of people with mid level technical knowledge (i.e. people with say 2 year degree equivalents) that tend to get poo-pooed here in the US.

One thing that I found interesting was the number of people who place the blame on Apple for making these choices even as Americans outsource every day when they purchase products that say clearly “Made in China”.

160,669 views 94 replies
Reply #51 Top

Quoting gmc2, reply 49
thank you for the sincere wishs of long life and health (snot).

gmc2...yes, that's what I thought...

These Generation ME kids think they have all the solutions to what was screwed up by the baby boomers...... just as we knew for damn sure what everyone before us got wrong.

Ain't nuthin' new in the world....other than youngsters....;)

[trick was/is....don't breed]...;)

Reply #52 Top

Quoting Jafo, reply 51
they have all the solutions to what was screwed up by the baby boomers......

Really? Here's a 'baby boomer'.... cheap, too.

Reply #54 Top

Quoting LightStar, reply 53
This makes me want to puke: http://www.msnbc.msn.com/id/46121303/ns/business-us_business/#.TyAmtch-dss

Check out the other link off of that article that talks about "Why Apple can't make iPohones in the US.". Here's the link:

http://www.msnbc.msn.com/id/46091572/ns/business-us_business/t/why-apple-says-it-cant-build-iphone-us/

Notice the name of the article at the top of the page says " Why Apple says it can't build an iPhone in the US ", but when you look at the name of the article as it appears in your tab it says " Why Apple Won't Make iPhones in the US ". Not that a possible typo means anything but I thought it was interesting to point out, not because Apple can't make iPhones in the US, but simply because it doesn't want to because of costs. Regardless of whatever excuse they put out to the public, that's the real reason and no amount of explanation will ever convince me otherwise. It's about money and profit, plain and simple.

If you read the second article I link to above it says that by Apple's own records that, and I quote, " Last year, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google. " . Now THAT makes me sick, and should make anyone who actually works for a living sick as well. Not because the company was so successful, but because they made that kind of money off of people's blood, sweat, and tears, to the point where a visible percentage of their work-force commits scuicide, and yet out of that 400K per person none of that profit is being given to the people who deserve it. They could have afforded to give every single employee they have a 25K bonus and STILL made a profit of 375K per person.

From my point of view having a large entity, be it a business or a government or even a person, making so much off the work and pain of others and not giving anything back....it might as well be slavery or feudalism, alive and thriving well in our so called "Civilization". There's nothing civilized in my eyes about people being so blatantly taken advantage of.

Apple could make iPhones here in the US. But they won't because of the so called staggering costs. They would supposedly have to pay to upgrade the factories here, pay to train workers, and of course the vast difference in pay scales and benefits between American workers and their Chinese counterparts.

Something else in the article really stood out to me. Here's another short excerpt.

" One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day. “The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.” "

....Wow....fucking seriously? That makes me want to puke. Apple was able to redesign something and then get it on the production line because the workers live on site like animals. These might as well be "Work Camps" or "Prisons".

Another thing is you can't even blame the workers. It's not their fault. Like those of us in the work force here, they're just working to feed their families and themselves. They work because like most of us they don't really have any other choice. There are a lot of countries in the world where the working classes are blatantly taken advantage of and they're forced to work for almost nothing. Mexico, China, Korea, and so many others. The Governments of these countries don't really care about their people at all. They see them as an almost inexhaustible slave labor force because they are poor and will work for almost anything because even that small pittance the companies give them will help by feeding them or their loved ones. Those in power in the Governments who make the laws the poor must live and work by, and those who own the corporations who make the profit, are the only ones making real money in any of this.

Reply #55 Top

@RavenX  You can't blame Apple for doing what just about every other company are doing to mass produce goods. The actual problem relies on China's government itself. They allow the making of companies in China to put workers in those situations where they are making very little income six days of the week.

 

Right now China are on there "Spring Festival" (Chinese New Year) it is one of the major breaks that have each year. If Apple manufactured I-phones here in the US they would easily have to pay more money out of there pockets. Doing so would make I-phone prices sky rocket. Plus China advertises there country as mass producer markets.

 

Not everyone in China is slaving away at a machine but many people are just to provide for there families back at home. When I say back at home I mean that the majority of Chinese people never get to go home but live in crowded apartment facilities provided by the companies they work for.

 

If you really want to voice how you feel about Apples methods then don't buy there products, It's that easy. When someone does fork over there cash to a company they might not know it but they are supporting that companies business methods also.

Reply #56 Top

"How can they have 3,000 engineers on pop-up as well? There's more afoot than population density... although that's tempting...

 

@ DrJBHL Part of the answer to it is China is training 3 times the number of engineers a year that America is, and that gap is growing. Even India has over taken America in numbers too.

Reply #57 Top

Quoting Computica, reply 55
@RavenX  You can't blame Apple for doing what just about every other company are doing to mass produce goods. The actual problem relies on China's government itself. They allow the making of companies in China to put workers in those situations where they are making very little income six days of the week.

Right now China are on there "Spring Festival" (Chinese New Year) it is one of the major breaks that have each year. If Apple manufactured I-phones here in the US they would easily have to pay more money out of there pockets. Doing so would make I-phone prices sky rocket. Plus China advertises there country as mass producer markets.

Not everyone in China is slaving away at a machine but many people are just to provide for there families back at home. When I say back at home I mean that the majority of Chinese people never get to go home but live in crowded apartment facilities provided by the companies they work for.

If you really want to voice how you feel about Apples methods then don't buy there products, It's that easy. When someone does fork over there cash to a company they might not know it but they are supporting that companies business methods also.

Indeed that's all true. I don't blame Apple as much as I blame the systems that make what these companies do "ok" when it's not. I also don't own or want to own anything made by Apple. As for the prices skyrocketing, I'm not so sure. They definitely wouldn't be making 400K a year off of every employee, but I'm sure they could eat into that profit margin a bit, keep iPhones at the cost they are now, and still afford to bring those jobs back to the US while maintaining a profit to keep their business going.

If they were willing to make less profit they could afford to make iPhones in Siberia if they wanted or even the North Pole. It's all about their profits and the greed for more. It should be about taking care of the people, not the bottom line of how much money they can make off the people's work.

Reply #58 Top

Being greedy is sometimes the main motivation of some companies. Most people not only want to make bigger profits than last year but give themselves big bonuses also. You eventually would have to wonder what it all leads to if you own a company that didn't have any competition or was the top at its class.

 

I remember seeing a animated music video where this creatures were working in a factory production line. The entire world they lived in was depressing and dull and so were they. They would use these binocular devices (they were building in the factory) to feel happy. The boss of the factory was mean and angry, shouting at the workers to work harder. One day one of the workers decided to upgrade the device to an even better device. So he left the company and started selling the new new one. Eventually after growing his company big enough he started to become mean and angry. The video ended with one of his employees finding a way to make an even better device and leaving the company.

 

I can't remember what the song was called otherwise I would have posted it.

Reply #59 Top

Quoting Computica, reply 55
Doing so would make I-phone prices sky rocket.

Apple profited around $10 billion (PROFIT) the last quarter. who's to say they are not already overpriced?

Reply #60 Top

Quoting gmc2, reply 59

Quoting Computica, reply 55Doing so would make I-phone prices sky rocket.

Apple profited around $10 billion (PROFIT) the last quarter. who's to say they are not already overpriced?

Oh they are. The thing is.. sure they could make it in the U.S. and not drastically increase their prices. But then that would reduce their profits. Lets be honest here.. its about profits. Despite what some apple fans might think... the company exists to make a profit. Increased costs always gets put on the consumer because companies are unwilling to accept a reduction of profits. Not making a judgement on it.. just pointing out how it is.

Reply #61 Top

Increased costs don't get passed on to the consumer in highly competitive markets, or with elastic goods.

 

It's the stuff that hasn't had a free market develop yet, or has had its free market broken by large corporations, that costs get passed onto the consumer.

Reply #62 Top

Quoting Alstein, reply 61
Increased costs don't get passed on to the consumer in highly competitive markets, or with elastic goods.

It's the stuff that hasn't had a free market develop yet, or has had its free market broken by large corporations, that costs get passed onto the consumer.

Yep, in Apple's case it is because they do a great job differentiating their product, so they have little real competition. So in a sense they do earn those profits. Consumers don't have to buy overpriced Apple products, but they do. Apple does keep pushing the technological limits of handheld devices and coming out with great new stuff.

Reply #63 Top

Quoting Computica, reply 58
Being greedy is sometimes the main motivation of some companies. Most people not only want to make bigger profits than last year but give themselves big bonuses also. You eventually would have to wonder what it all leads to if you own a company that didn't have any competition or was the top at its class.

 

 

The very nature of large public corporations is that they are beholden to their shareholders.  Shareholders, as a general rule, want short-term profitability over everything else.   Also, large public corporations have no concern about whether society benefits from their decisions, outside of when the law makes them, or if it's profitable for them to care.

 

The real issue to me with Republicans is that they seem to think the government has little role in making large public megacorps care about anything other then profits as a general ideology. 

 

The problem with making them care too much though is that globalization allows for a race to the bottom on these issues.  You can always move things to countries that allow you to exploit left and right.

Reply #64 Top

um.. why do you need to be an "engineer" to stick bits of stuff on a board? it's just like lego. except it's more skilled, high tech, toxic, dodgy hours, crap pay (well.. pay is good compared to everyone else over there.... but different living standards)

 

(no.. haven't read the article. not registering or paying for news) <--- cookie issue

 

--

the other way of looking at things is that in usa, you have massive farms that uses massive machineries to achieve scale advantage (nevermind the gm/hormones, etc stuff, which gives even more, though can be banned by other countries), compared to tiny plots of land that are farmed by lots of families in other places of the world... which doesn't give such yields and are thus "disadvantaged" compared to usa.

 

it's just a case of not investing in higher tech (robotics) things to do it the us way and try to do things cheaply.

Reply #65 Top

http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?_r=3&pagewanted=all

<_<

Reply #66 Top

You worry too much, people. We are running out of resources, global oil production decline is coming around 2015

http://www.theoildrum.com/node/8797

fish are eaten, drinkable water will be in short supply soon too, and world's population is steadily growing. The jaws of the famous Malthusian trap (1. all people need to eat, 2. all people want to have babies) will soon bite off a sizable chunk of world's population, and we will return to numbers sustainable before the industrial revolution worldwide - that is one billion people max globally.

Will it hurt? You bet. Could it have been averted? Probably, but not in a world where greed is an official state doctrine and laws just create a playground for it to eat whatever is there to be eaten. We would have to restrain ourselves, choose rational, restrained moderation instead of unsatiable consumption and excess. We would also have to try and educate those without access of information or lack of processing power to connect the data.

We chose not to. Soon, the laws of physics will respond with natural, unregulated, "laizess faire" correction - a die-off of massive proportions.

Who will survive? Those who usually do. The aggressive, the greedy, the remorseless, the strong, the brutal and the simple ones. The survivors. They will build a new world on the ruins of this one, as barbaric German tribes did on the ruins of Rome. I hope I won't live to see it.

 

Reply #67 Top

Quoting tazgecko, reply 19
We are going through the same thing down here. The mining industry is complaining about not having enough skill workers, but are not prepared to train the workers. The will import workers from other countries before they put in the time to train someone. It's a lazy, faster way to have a flexible workforce. Good in the short term, hurts Australia in the long term.

 

It's the same all over the Western hemisphere. Wages in Switzerland have stagnated or gone down, while house/flat-renting/buying has become almost un-affordable just because our politicians have opened our borders to the whole of the EU. The reason behind this was of course the lobbying of our economy who cried for "qualified" labour, claiming that there wasn't enough of them in Switzerland. At the same time they introduced a so called "numerus clausus" (only the ones with the highest mark get in) at our Universities, which of course discriminates Swiss-Students, as our high-school level is way above the levels in the surrounding countries (it is much harder to get into high-school here - and to get good marks - than everywhere else).

Now 200 People (a whole lot of them without any education at all) are immigrating every single day into a country that is smaller than Tasmania, has already a population of 8 Million! (25% of which are non-Swiss) and which has a land-mass mostly consisting of steep mountains and lakes. This results in a very high population-density, the aforementioned impacts on wages and housing, as well as in increasing unemployment. To conceal the latter, unemployed people are forced into disability-rent, social-services, useless schooling and "work-programs", since all of these miraculously don't show up as unemployed anymore.

 

If this keeps going on (an our politicians don't seem to take the surveys seriously which say that 70% of the Swiss people have enough and wan't to stop immigration immediately), I predict social riots if not civil war  :annoyed: :(

Reply #68 Top

Quoting Jafo, reply 51
[trick was/is....don't breed]...

I'm doing my bit.

Reply #69 Top

Quoting Island, reply 65
http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?_r=3&pagewanted=all

1. http://drjbhl.joeuser.com/article/408791/Is_your_job_THIS_bad

2. http://drjbhl.joeuser.com/article/408882/Follow_Up_Is_your_job_THIS_Bad

 

Apple does what every company is supposed to do: They make money. They make as much as they can. Do they care how? Maybe... or maybe their "Quality Assurance" program is a "do your best to fix it" type deal where problems of deviating from Apple's contract standards are reported/found, reviewed and remedial action demanded... just how much improvement and over how much time? Is it real? Is it "plausible deniability" and cover-up?

Do business with the devil, and there's hell to pay. Does Apple really think they're getting away with it?

Yup... all the way to the bank:

"Apple Reports First Quarter Results

Highest Quarterly Revenue and Earnings Ever

All-Time Record iPhone, iPad and Mac Sales 

CUPERTINO, California—January 24, 2012—Apple® today announced financial results for its fiscal 2012 first quarter which spanned 14 weeks and ended December 31, 2011. The Company posted record quarterly revenue of $46.33 billion and record quarterly net profit of $13.06 billion, or $13.87 per diluted share. These results compare to revenue of $26.74 billion and net quarterly profit of $6 billion, or $6.43 per diluted share, in the year-ago quarter. Gross margin was 44.7 percent compared to 38.5 percent in the year-ago quarter. International sales accounted for 58 percent of the quarter’s revenue.

The Company sold 37.04 million iPhones in the quarter, representing 128 percent unit growth over the year-ago quarter. Apple sold 15.43 million iPads during the quarter, a 111 percent unit increase over the year-ago quarter. The Company sold 5.2 million Macs during the quarter, a 26 percent unit increase over the year-ago quarter. Apple sold 15.4 million iPods, a 21 percent unit decline from the year-ago quarter.

“We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” said Tim Cook, Apple’s CEO. “Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.”

“We are very happy to have generated over $17.5 billion in cash flow from operations during the December quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2012, which will span 13 weeks, we expect revenue of about $32.5 billion and we expect diluted earnings per share of about $8.50.” 

http://www.apple.com/pr/library/2012/01/24Apple-Reports-First-Quarter-Results.html

 

I can't help but wonder how many investors really care how the profit was made as they stroll and drive listening to their "tunes" on their way to their banks?

I bought my iPad before I learned of the conditions those workers live (and die) under.

I do know that when I turn my iPad on, I get a slightly bilious feeling while I wonder how much I contributed to a person's misery or death.

Reply #70 Top

But what about all the other companies that use those types of worker conditions (or even the same factories)?

Reply #71 Top

Quoting StevenAus, reply 70
But what about all the other companies that use those types of worker conditions (or even the same factories)?

Same.... sickening.

Reply #72 Top

Quoting DrJBHL, reply 69
I can't help but wonder how many investors really care how the profit was made as they stroll and drive listening to their "tunes" on their way to their banks?

 

I don't think they care even the slightes bit. They are problably planning in their minds on how to move the factory to North-China or Kambodia when they stroll to the bank, as they feel that the workers in South-China demand too much and that they (the investors) have not made as much money this year as they could have if only they wouldn't have to pay these South-Chinese those exorbitant high wages...... Some other companies have made this step already.

Reply #73 Top

Another one you wont see on the MSM because Whirlpool advertises there.

Reply #74 Top

How many iPhones & iPads do you think would have sold at $1,000 a phone & $1,500 an iPad?

How is that the Empire State Building, the Golden Gate Bridge and Hoover Dam were built in a span of 7 years in the middle of the Great Depression?

Reply #75 Top

Quoting Daiwa, reply 74
How many iPhones & iPads do you think would have sold at $1,000 a phone & $1,500 an iPad?

It probably matters less than you'd think since most people get contracts that subsidize the hardware.