I was reading the blog of an ex-JET participant whom I respect a lot for her style of writing and came across a post about iPhones.
Some time ago, I was hesitating between getting an iPod Touch and an iPad2. The thought of getting an iPhone had crossed my mind before but phone bills would go over ￥5,000 a month and I don’t even use the phone all that much. I’m currently using the pre-paid card I got from Softbank over a year ago and ￥3,000 every 2 months is a good money-saver for me. For the applications though, I wanted to get one or the other Apple product but I’ve yet gotten any because I simply don’t see much else use for them.
I believe over 80% of my friends in Singapore are using the iPhone and my cousin just got herself an iPad2, her husband has one from his boss and their 2 year-old daughter has one from her grandpa. Yes, two.year.old.
Granted, I haven’t been home for almost a year now so I may not know exactly what has been going on there but I was talking to my best friend the other day and he told me that iPad2 is so common back home now, you see children – I repeat, children – playing with them on the buses while their parents get busy on their iPhones. Admittedly, I do get drawn by the applications that these mobile devices have to offer but I frankly couldn’t see much practical use for them. At least in my case.
Going back to the point on the ex-JET participant’s blog entry, she mentioned that the total manufacturing cost of an iPhone is only US$179 or SG$222 and the profit margin is so great, Apple wouldn’t be affected much even if Foxconn workers’ salaries are increased 10 times which would amount to an additional US$69 per iPhone. Assuming this is an accurate figure, for a business to more precisely calculate their profit margin, manufacturing cost is not the only expense that has to be factored in (think marketing, administrative and logistics costs) and I also do not think it is logical to break down expenses to how much it costs per iPhone because in large volumes, whether the amount (that grows pretty significantly) can be sustained all boils down to the business’ cash flow.
Now, I’m not a fan of Apple’s, proven by the fact that I have never ever owned a single Apple product and I do not support the low wages offered to the factory workers in China but Foxconn has a million Chinese workers under its wing and increasing its workers’ salaries by 10 times which is currently at 2,000 yuan (US$290) would mean 20,000 yuan (US$2900) per worker – a US$2,610 increase per worker. Multiply that by a million workers, that would be US$2.61 billion increase in labour costs per month, which is almost SG$4 billion. Remember, this amount is to be paid for by Foxconn, not Apple. So, salary increments have no effects iPhone’s profit margin, much less Apple.
When I took my translation test some 2 months ago, the content was coincidentally the Foxconn article and its suicide rates. In the article, there was an interview with one of its workers who makes twice the salary of most of his fellow workers but he, too, felt suicidal. In the interview, he said that it wasn’t the pay but the repetitive and dull nature of his work made him unable to see any future.
So no, 20,000 yuan a month is not going to save this man’s life.