Chinese website Zol -- which is owned by CBS Interactive -- is reporting that Apple may be moving toward a model of paying
Foxconn employees direct subsidies, in the form of small percentages of the profits from whatever product line they work on. It's also interesting to note that the report claims that Apple has
looked into the situation, and found that the general unhappiness of the workers and the recent spate of suicides could be attributed to low wages. The report says that Apple -- which apparently pays Foxconn 2.3 percent of the final retail price for a given product -- will pay an additional amount directly to the workers, which would give a significant boost to the roughly $132 they're currently pulling in per month. The actual payout numbers we're hearing -- around 1 to 2 percent of a retail price of the products manufactured -- don't exactly make sense so we're hoping to get clarification as to the breakdown if the rumor turns out to be true. The report also states that the
iPad production line will be the first to benefit from the scheme. We have asked Apple for comment and will update if and when we hear back.
posted May 31st 2010 12:19PM
This wouldn't happen is Apple made their product in the USA.
Seriously, BRING JOBS BACK TO THE USA.
It has been proven that products made in the USA are far more superior than ones made in Asia. Besides, here they would pay people enough to be able to actually afford what they manufacture all day.
@John Lennon More accurately, if Apple had all of their products made in the USA, they would have far lower market share due to being far too expensive. Products made in the USA have never been proven to be superior to any other country, just directly support the local communities. If you pay people more money for production, you have to charge the customers even more money to cover all your overhead increases. The only way to keep your price point reasonable is to further reduce quality until you have no more cachet.
@kripo23 Well, A. I could care less about how much market share Apple owns. I buy my product based on what I like, not some numbers and how many people statistically buy the same thing.
B. Apple do have factories in the US. They still make computers in the US, but the amount they make is MUCH smaller compared to the amount they make in Asia. It's actually really rare to get a computer that's made in the USA, and the only people that do get it are usually developers.
@John Lennon You may buy a product based on what you prefer, however the cost has bearing as well. As many people already complain that Apple products are too expensive, increasing the cost will not exactly to anything to help Apple remain competitive in the world market.
@John Lennon
"It has been proven that products made in the USA are far more superior than ones made in Asia"
Wrong, and false. Stop trolling. By the way, who makes your clothes and shoes? Who makes your computer?
@pika2000 lol well that statement doesnt sound familiar at all you hypocrite just because its outsourced doesnt mean it cant be a legitimate buisness you corrupted immoral asshole. so you are happy with others suffering so long as you get what you want well heres news for you if you would read you would know that i support outsourcing but not as a means of exploitation like its being done here and i commemorate apple for doing this but this isnt even the beginning this is still just a publicity stunt to shut people up if real action is to be taken it would have to be legal action so if you love such a lucrative buisness i think you should live in their shoes for a year.
Go Apple, nice one! Let's hope other companies will follow and soon there will be no iPads here because they can all buy one there directly after they finished making one
while the gesture by apple is on the surface a good one ...please explain to me that while getting their products made dirt cheap ,and giving a small piece of their unbelievable profit...that they charge much higher prices on all sorts of goods ...so they charge high and rebate back to the worker a small percentage of their obscene prices...I will know when they are truly serious and not just looking for good PR,when they lower their prices or bring some of that manufacturing back to the states then even I will buy their products ,even at their high prices...you know a friend of mine once said he donated 400 turkeys on thanksgiving day ,and I said to him that is a very nice gesture,what made you think of it ....HE SAID MY ACCOUNTANT and MY PR DEPT >>>
Wow. I'm very impressed.
now do they get national health,vacation time,how many hours a week...and just like the good old usa of the past...people don't go there to work because they want to they have no choice ....a job is a job...no matter where you live...
How is it possible that Apple only pays Foxconn 2.3% of the final retail price for any given product? An entry level iPad @ $499 would be $11.48/unit FOB China - which is BTW completely absurd. 23% ($114.77 FOB China) is a much more possible cost structure. The Chinese are cheap, but they're not suicidal (no pun intended) when it comes to doing business.
How about Apple opens a factory here in the States and help out the country that made them billions.
@Mr Pips If they did, they wouldn't make billions, or your Mac/iPads will cost you 10 times as much.
@Mr Pips
And the award for the worst business plan I've ever heard goes to................
@Mr Pips simply cut your an idiot, complexly cut your an idiot. outsourcing just needs to be under a lot more of a scrutinous look in legal terms the standards are wayyy too low.
Here at Sebben and Sebben, we value our employees. Employee benefits include chairs (for earners), left over scraps from the board meetings, and emergency exits (for senior members).
This would only make sense.
iSupply found that iPad costs $259, so there's somewhere between a $241 to $541 in retail price of the various iPads.
http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
OBVIOUSLY it's not all profit, but there's definitely some (PLENTY) of profit room in there to spread to the workers.
@Johnny Rockets
Like I said, iSupple are morons, and if you quote their numbers this way, you don't know anything about business.
Let's take the iPod, for example
You're leaving out the cost to....., design the iPod, manufacture the iPod itself, market the iPod, build and maintain the iTunes store, or pay lawyers to strike deals with content holders to sell songs through the iTunes store.... All you've done is found Apples COGS, cost of goods sold. And tried to extrapolate some... meaning from that.
I don't see how Apple has a choice. Their name has been included in almost every report about Foxconn. If they didn't do this people would look at them as a horrible company. I think they have to do this so the public wont make that conclusion.
Its not as if they're such an altruistic company. Yes they make good hardware and software but from a PR stand point its almost like a must. No company wants to look bad in the peoples eye since that ends up leading to lower stocks and less of your product being purchased.
I wonder if Apple would have gone to these lengths if the problems over at Foxconn never got out. Chinese factories are notorious for being terrible and not many companies have gone out of their way in the past to help the workers out and thats mostly because not many knew. Today its much easier to expose such conditions so companies have to pay up no matter what or else feel the wrath of the public eye.
@EmGee
If "no company wants to look bad", then how come the other companies who buy from Foxconn aren't doing anything? Like Dell, HP and Nokia?
@Jack
Corporations are corporations. My guess is Apple has increased popularity than the others. More people pay attention to what Apple does these days more so than the others. Im guessing the others, like most corps, dont care and probably wont feel the brunt of "looking bad" as much as Apple may. People already dislike those companies or dont care them as much as they do for Apple or maybe they dont even know them. So they dont bother with it. Many people today consider Apple a premium brand and the rest just cheap knock offs and thus with any premium brand you must keep up that style and look through out all workings of the company.
Lets say Apple didnt do this, people would look down on them more so than Dell or Hp simply because they expect that. Apple knows this and thus has no choice but to pay. If no one ever found out about the working conditions and issues over at Foxconn I dont know if Apple would be so eager to help out. And I dont think the others would "Launch Investigations" into the issues.
Or quite possibly Dell, HP Nokia and who ever else are in the works for doing something similar in terms of paying the employees of Foxconn but Apple came out first with its plans and subsequently all others who follow will be labeled as typical followers to the beat that Apple sets.
Since not many care for what the other companies are doing Apple has to do all it can to save its arse when regarding the mind share of the people. Thats just my guess.
@Jack none of the companies that you mentioned buy from foxconn look it up buddy. second of all their factories dont have enough suicides in order for them to have to be publicly humiliated into giving them subsidies its sad that we praise mediocrity such as this.
Is that the same girl who looked so completely bummed in the previous photo?
@BuzzMega
No, that's ... no Laura June, its a Chinese worker.
"The report says that Apple -- which apparently pays Foxconn 2.3 percent of the final retail price for a given product"
I realize this is a BLOG, but the amount of speculation about this stuff is mind-boggling. Do you have any evidence at all to back this up?
This number just annoys the hell out of me: Foxconn did not make the iPod, design the iPod, market the iPod, build and maintain the iTunes store, or pay lawyers to strike deals with content holders to sell songs through the iTunes store.... they are contracted to MANUFACTURE IT.
The reason its a small percent of the overall RETAIL price, is that Retail includes all of Apple's related iPod costs, and a healthy profit margin.
What do you think would be a good % for Foxconn to basically get an order from Apple, describing the newest iPod touch, and say "Ok here's the specs, we're sending you the chips, casings and the screens, you put'em together"
Seriously, this bugs me because it reveals a FUNDAMENTAL misunderstanding of business. This, and the iSuppli guys, who try to point out every tech product and say "WOW, WE'RE GETTING RIPPED OFF" because, basically, the materials for a product are nowhere near the final cost of the product (let alone the retail price!)
Is it 2.3% of the retail price after materials, supplies, consumables and other below-the-line costs?
@BuzzMega
Don't bother digging, it was a made up BS number anyway.
is this a joke 132 more dollars a month thats just a fucked up joke apple i mean seriously i feel really bad for these people thats like getting spit on in the face you cant even buy groceries with that let alone help you pay for rent. thats really sad apple really sad god learn to manage your manufacturers.
@Ralven Grocery or rent? Where do you think these people are? You're trying to equate your standard of living to them. You sound like a hypocrite. What clothes and shoes are you wearing, and do you think people making your clothes and shoes are better than Foxconn employees? And Apple is not Foxconn. Foxconn has contracts with other companies like Dell, HP, Sony, and whatnot. Where's your complaint against those companies?
@Ralven
So it's 1000RMB, and they don't PAY rent because they live at the factory... That's why they want to work there. Basically they have no expenses, and they save up money.
Which is more than I can say for millions of Americans living paycheck to paycheck, and buried in Credit card debt.
@Wesscoast if its such a good life why dont you go live there hypocrite
@pika2000 quit trolling troll first off second off how would you know my standard of living i could be a bum in a library right now thirdly if you havent noticed the specific factory their talking abou is the one that makes your precious ipad no other factories. and lastly anyone else who supports outsourcing the way it is in this specific factory should go to hell for having no moral spine, outsourcing should be regulated better and under extreme legal scrutiny.
instead of bringing the production back to US they are trying to be Mr. NICE GUY, they will be paying direct wages, like how much ? they get 10$ a month more ? Apple is laughting with wide open mouth. sure its easy to pay them if here u have to pay 100 times more for the same work. just go on Support american slavery economy.
Cool kick them a few more cents to rationalize a guilty conscience.
How many has APPL killed today?
Wow $132 a month.. that's 90€! Time to move my company over there!
If I was Apple i'd go for the Vertical monopoly, fuck foxconn. Start our own factories.
you saying to respect a rumor respect it if its validated
hey boss, give me a raise or i'll kill myself !
I don't care how much they pay them, those jobs still suck! Sitting in a chair for umpteen hours a day plugging components on boards....how many Americans would be willing to do this kind of work?? Seems like they could build robots to do this type of work, but I guess at $130 month human labor is far cheaper.
So, if they start with the iPad production line, does that mean the suicides will turn into "questionable deaths" as people try to get on that line?
Wow, now thats what I am talking about. That looks like fun.
www.anon-posting.at.tc
Whether it's environmentally, or for mankind, Apple has always done the right thing. Far more than can be said of most other Fortune 500 companies.
Are you listening, British Petroleum????
This is great news and all but ultimately like many said this is the same problem with most things we buy in the U.S., and ultimately there won't be a difference until there's a widespread change. Apple can pay more but theres only so much they can do while still being competitive when every other company is taking advantage of low wage workers, and somehow I think this is much more damage control than caring for workers. After this is business....