Quote:
Originally Posted by Russic
As angry as stories like this make people, I highly doubt they are willing to vote with their dollars against it. There will be those who would be fine paying an extra $50 if it meant the workers conditions were improved, but I feel that number would be quite low.
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This is one of the reasons Apple is being singled out.
Most other electronics companies out there are working with small 1-5% margins in a cutthroat industry. Apple on the other hand has a near 35% margin overall on all their products. Depending on perspective, some might be viewing Apple with the same prejudice as they do with oil companies - companies which appear to be making money hand over fist and not visibly kicking back that money back down the chain where it could improve environmental or working conditions.
A 32GB iPad2 w/WiFi + GSM HSPA is estimated to cost $336 to manufacture. $326 of that is in material costs. The other $10 is all Apple pays for manufacture. Using the $1.11 USD/hour rate of Foxconn, that - works out to about 9 hours each to complete.
That 32GB iPad2 w/WiFi + GSM HSPA sells for $729 at the moment. Apple's margin on this particular product is 46% (may be closer to 35% after soft costs) or $393. That extra $50 you are asking for is only 13% of Apple's profit on this product. Apple is doubling their money on hardware alone.I don't think it's fair to be asking the consumer to pay more just to ensure decent working conditions and fair wages for their factory workers in China? That should come out of their profit margin to ensure ethical treatment of workers, not out of the consumer's wallet.
Pricing break-down:
Keep in mind, Apple also makes money on their software, application, and entertainment ecosystems. Most electronics companies sell hardware at near break-even to make money off their ecosystems. Others without this ecosystem have to rely on tiny margins on their electronics products alone. Apple has both.