sherry. - Apple’s Avarice: Efficient, Excellent, and Economically Sound. Is It Fair?

January 31, 2012

Apple’s Avarice: Efficient, Excellent, and Economically Sound. Is It Fair?

We might not have the flying cars, yet, but we’re sprinting to the future anyway. One company in particular, Apple, has constructed fabulous technological edifices that effortlessly extend our capabilities. Its contributions — inaugurating computer revolution after revolution revitalizing digital media, bringing technology to bear on education’s problems — they seem miraculous. But a barrage of spate of recent news has delineated their actual human cost. These stories are a somber reminder that Apple’s seemingly ex nihilo tech goodies come to market because of its implacable business drive.

Apple’s products are to most eyes beautiful instantiations of the old design saw: form follows function. Before the iPhone’s debut in 2007, everything about mobile phones was different. Now, virtually all smartphones follow the iPhone’s form — and arguably fall short of its function. On the back of every iPhone, there is a brief line that tells its owner exactly why its so special: “Design by Apple in California Assembled in China”. Those eight words effectively describe a situation many consumers are unaware they’re participating in: the high level of Apple’s California-based design is what’s most obvious about the iPhone, but it wouldn’t exist without Apple’s fabled supply chain management and its manufacturing capabilities in China.

The New York Times recently published two reports critical of Apple’s labor practices in China. The first noted the vast scale of the California-based company’s operations in China: the iPhone alone requires more than 200,000 workers and 8,7000 engineers for its manufacture. On his passing away last year, Steve Jobs was widely lauded for his innovation; President Obama said, he “he transformed our lives, redefined entire industries”. But the exact dimensions and ramifications of Jobs’s transformation of personal computing is somewhat misunderstood. Just last week after the president’s Sate of the Union address, Indiana Governor Mitch Daniels said, “The late Steve Jobs, what a fitting name he had, created more of them than all those stimulus dollars the president borrowed and blew”. If it’s American jobs that are at issue, then Apple’s success has created 60,400, 59% of which are retail jobs — a pittance compared to its operations overseas. According to the Walter Isaacson biography, Steve Jobs was the primary force in creating Apple’s dominant retail position, but he was also the catalyst for closing Apple’s American factories and moving virtually all of Apple’s manufacturing jobs to China.

Apple has long had a reputation for making luxury goods, at best, and overpriced doodads at worst. The grounds for that reputation are gone. Steve Jobs had a dual-genius for intuitive design and having the steel will to realize it. His successor, Tim Cook, has a single-minded expertise in trimming fat and cutting down the bottom line. He’s an operations guru renowned for keeping costs low. Again, according to the Isaacson biography, Cook “forced” suppliers to cut their prices and move their operations next to Apple’s plants in China. Apple enjoys such a powerful and efficient manufacturing process that it’s now a price leader for laptops, and virtually the only profitable manufacturer of tablet PCs.

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Definitely worth reading.

Also please read this asshole on Forbes who probably also believes in child labor.

I feel pretty strongly about all of this from having 15 years of manufacturing experience in China and having traveled there several times.

One interesting point is that the US does not have the technology to produce the way China does. The machines are made there and they are not sold in the US. It would take a huge initial capital investment for manufacturing to return to the US, but who better to lead that revolution than Apple?

And yeah, I’m sure that the wages being paid to factory worker at FoxConn are better than usual. I know this to be a fact: during my last trip to China in August, the garment factory owner I spoke with told me that there is a huge manual labor shortage in China as most workers are becoming engineers. The thing is, Apple has the leverage to create working environments where people aren’t killing themselves. It’s a matter of ethics.

Every large manufacturer has a Supplier Code of Conduct and conducts factory audits to ensure the codes are met. I’ve done this myself. If a factory fails, you drop them until they’re up to par, or drop them altogether. This obviously isn’t being done properly. I can only imagine the kickbacks to third party auditors that are happening. Explosions due to lack of ventilation? Are you kidding me?

Apple needs to get their shit together.

9:44am

(Notes: 29)