This article was first published on 1 Nov 2010 in the print and online edition of The National
If you are an aficionado of Apple computers, then is this a great time or what?
Loyal customers have witnessed the launch of eye-popping consumer and crossover business products such as the iPod, iPhone and iPad.
Private and institutional investors in Apple have seen the stock price rise in the past 10 years from US$9 a share to more than $300. Either way, Apple is hot property.
It's a brand we've fallen in love with, personifying artistry and engineering in a magnificent prism of spectral creativity.
Apple rewrote the meaning associated with portable music. Before the iPod, companies focused on performance improvements of their MP3 players by simply adding more gigabytes to the devices.
The companies playing in this category used newer digital audio encoding technologies but the product meaning remained the same - to enable a portable musical experience.
Apple didn't try to compete by offering more gigabytes, it forged a new meaning: the seamless creation of personalised music.
The iTunes store allowed customers to buy music legally. No more Napster hangover. The iTunes software application enabled the simple management of this personalised music. The iPod was then the device that carried the personalised music about.
Fundamentally, it was an entirely new business model that made it simple for customers to buy music, compile it and listen to it. And we all snapped it up.
Apple quickly followed the iPod with the iPhone and more recently the iPad. The company today has great brand equity, a strong cash position and is being egged on by the analyst community to go make some serious acquisitions.
We're so infatuated with Apple we fondly forget that it makes the iPhone 4G for an estimated $6.54 (Dh24) in China (1), which is about 1.1 per cent of its retail price.
We'd rather pay handsomely through the nose so that Apple retains profit margins above 60 per cent and the analyst community keeps asking for more. I think the word "mug" rather than the image of a fresh fruit comes to mind.
So is there anything that we the customers should really be worried about, since we don't seem concerned about the 98.9 per cent mark up in price?
Well, Apple did fall from fourth to ninth in the Greenpeace Guide to Greener Electronics rankings (2). Greenpeace said the company did not provide clarity on their use of organo-chlorine and bromine compounds, or the future phasing out of its use of toxic chemicals. But these factors are unlikely to stir many consumers into a boycott.
Is there nothing else? Well, there was the report released by the Hong Kong based non-profit organisation, Students & Scholars Against Corporate Misbehaviour (SACOM) two weeks ago (3), titled "Workers as Machines: Military Management in Foxconn."
Foxconn Technology Group is the world's leading maker of electronics. It has a workforce of more than 900,000 in China. It is also makes the Apple iPhone and iPad, and is a supplier to Nokia, HP, Dell, Sony, Sony Ericsson and Motorola
The investigative report examined the working conditions at the Foxconn factories in Shenzhen and Hangzhou. You may remember these locations as the places where 13 Foxconn workers killed themselves between January and August this year. All of them were between the ages of 17 and 25, and most jumped out of factory windows, with one slitting his wrist.
The report blames profit maximisation for taking away the dignity of the workers and says: "Foxconn is not the only one to be blamed, but it is the most typical factory run by a management methodology that boosts productivity through the degradation of workers into dehumanised machines."
Foxconn's response to the suicides was for its chief executive, Terry Gou Tai Ming, to suggest the workers committed suicide to obtain compensation from the company for their families. Apple is singled out in the report because of the pressure many workers endured when producing the first generation of the iPad, such as this testimony from an engineer at the integrated digital product business group of Foxconn in Shenzhen:
"We produced the first-generation iPad. We were busy throughout a six-month period and had to work on Sundays. We only had a rest day every 13 days. And there was no overtime premium for weekends. Working for 12 hours a day really made me exhausted."
Among the other militaristic tendencies of Foxconn the report details were: workers were disciplined if they spend too much time in the bathroom; "absolute obedience" was required; failure to meet quotas resulted in public humiliation; workers not returning to dormitories by11.30pm had to "volunteer" for janitorial services; and workers were beaten and harassed by the Foxconn security guards.
As to what the report recommends: "SACOM urges concerned organisations, consumers, investors, and the government to join the workers to pressure electronic factories to deliver decent working conditions in the electronics industry."
Apple and its chief executive, Steve Jobs, have declined to comment on this latest SACOM report, though earlier this year Mr Jobs did say: "Apple does one of the best jobs of any company understanding the working conditions of our supply chain." Whatever that means.
Mr Jobs, this is not a good enough answer. As Apple's customers, and those of the other brands mentioned, we should not be blind to these flagrant abuses of workers' rights in the pursuit of profit and personal satisfaction in consumption.
- This is the estimated cost of labour: http://www.theglobeandmail.com/news/technology/iphone-maker-faces-new-criticism-over-china-labour-practices/article1753051/ Market research from iSuppli indicates that the total cost of an iPhone is $187.51 http://www.isuppli.com/Teardowns-Manufacturing-and-Pricing/News/Pages/iPhone-4-Carries-Bill-of-Materials-of-187-51-According-to-iSuppli.aspx
- “Guide to Greener Electronics” http://www.greenpeace.org/international/campaigns/toxics/electronics/how-the-companies-line-up/
- “Workers As Machines: Military Management in Foxconn” http://www.sacom.hk/archives/740