Apple Considers Expanding Manufacturing Base to Indonesia

[victorvictoria]

That's the point. Buy at the cheapest cost possible, sell for the high price possible.

Yes, that is the point for a publicly traded corporation. In fact, it's the goal of ANY company in a capitalist society.

 

[victorvictoria]

That's always very misleading.

Adding up the cost of all the shares of any company does not tell us much other than the gamblers who play with equities are making long plays.

Apple has cash on hand and it has quarterly revenues, and it has IP. Those are the things Apple can use to buy/influence/bribe others to do its bidding.

Apple pays taxes on its income.

The gamblers playing the stock market are just doing their own thing.

Prudent investing in stocks is not gambling. It's the one and only way to beat inflation long term. Putting your money into fixed income products is not gambling: it's a guaranteed way to lose purchasing power over time.

Now, trading stocks, that's gambling.

 

[Surf Monkey]

Prudent investing in stocks is not gambling. It's the one and only way to beat inflation long term.

That’s kind of reductionist, actually. Sure, the markets have beaten inflation relatively consistently over the decades, but for the individual investor or portfolio manager it’s all about timing. “Prudent investing” is very much gambling. Whether you’re invested in the markets or securities or equities. All of them include inherent risk. That risk being losing money. IF you make these investments at the right moment and IF you sell these assets at the right moment, yes. You can beat inflation. But the risk is still there, especially if you’re not able for whatever reason to choose when to sell.

 

[victorvictoria]

That’s kind of reductionist, actually. Sure, the markets have beaten inflation relatively consistently over the decades, but for the individual investor or portfolio manager it’s all about timing. “Prudent investing” is very much gambling. Whether you’re invested in the markets or securities or equities. All of them include inherent risk. That risk being losing money. IF you make these investments at the right moment and IF you sell these assets at the right moment, yes. You can beat inflation. But the risk is still there, especially if you’re not able for whatever reason to choose when to sell.

So you'd argue that "investing" in bonds, CD's and savings accounts is low or no risk? The only guarantee there is that you WILL lose money, as inflation eats away at your investments. Interest rates for savers are ALWAYS set lower than for borrowers, and always will.
Also note that I said "long term." It's an inescapable FACT that the S&P has historically returned about 10% per annum in the "long term." The risk that you need the money when the market is down is a short-term problem. It has long been investing advice to, first: set aside cash for unforeseen expenses. Second, invest in stocks with a 5-7 year or longer timeline.

By your parameter, every time you get in your car, bus, plane or rail, go to a concert, take a drink, eat slice of bacon, get married, have sex, or engage in any activities of human endeavor, you're gambling. Risk is unavoidable. Gambling is not.

 

[Abazigal]

I feel like every time Tim Cook appears on this site it's to talk about where he's cutting costs and seldom about innovation.

Being able to make enough products to get them into the hands of tens of millions of users every quarter is innovation to me.

The best designed-products in the world are useless if no company can make enough of them to meet demand.

 

[rjp1]

Would you pay $5000 for an iPhone? I doubt. You’ll be first inline to complain about high prices.

And you know that isn't what it would cost.

We've seen other countries force them to build in their country if they want to sell them there. I wouldn't mind seeing the USA pass something similar. Apple will never do the right thing if they aren't forced - we've seen that plenty.

 

[Surf Monkey]

So you'd argue that "investing" in bonds, CD's and savings accounts is low or no risk? The only guarantee there is that you WILL lose money, as inflation eats away at your investments. Interest rates for savers are ALWAYS set lower than for borrowers, and always will.
Also note that I said "long term." It's an inescapable FACT that the S&P has historically returned about 10% per annum in the "long term." The risk that you need the money when the market is down is a short-term problem. It has long been investing advice to, first: set aside cash for unforeseen expenses. Second, invest in stocks with a 5-7 year or longer timeline.

By your parameter, every time you get in your car, bus, plane or rail, go to a concert, take a drink, eat slice of bacon, get married, have sex, or engage in any activities of human endeavor, you're gambling. Risk is unavoidable. Gambling is not.

My comment stands on its own. Attempting to reframe it to make me into a crackpot won’t work.

 

[victorvictoria]

My comment stands on its own. Attempting to reframe it to make me into a crackpot won’t work.

Don't think you're a crackpot. I think you've fallen into the trope that equity investing is gambling. This isn't crackpot, it's merely uninformed, and deprives countless people from improving their finances, putting their 401K into things like money markets and CD's. All you need to do is research a little information on what happened to $1,000 invested in an S&P index fund 25 years ago, vs. invested in debt instruments like CD's. Numbers don't lie.

 

[bousozoku]

The low-wage thing is a myth. Currently, in Malaysia, they have nearly full employment. I just looked it up and unemployment there is running at 3.3%. If Apple/Foxcon wants to open a plant with 20,000 workers they will have to offer pay high enough that 20,000 people will quite their current jobs and move to Foxcon. Gone are the days you cn offer a Chinese worker any money at all and they will work. Today your company has to be the best option, espacially when you need 20,000 in a country that has full employment.

We have the same thing here in California. The minimum wage is $17.50 per hour. In the pre-covid days retraunts used to be able to find employees with an offer of below minimum wage plus tips. But today it is illegal to offer that. they MUST pay minimum wage. But you know what? No one will work for only $17.50, even McDonald's has to offer a starting pay above that. As I said, with our current low unemployment, the ONLY way to hire a worker is to motivate him to quit his current job. You have to pay more than the other guy or offer better working conditions, promotion opportunities, or pensions.

Could you imagine would Foxcon would have to offer to cause 100,000 Americans to quit their jobs and go to work for Foxcon? It will never happen.

Minimum wage in California has been $16.00 per hour for 2024 with fast food minimum wage at $20.00 per hour starting May 1. Your city may have $17.50 per hour but that's not everywhere.

 

[Surf Monkey]

Don't think you're a crackpot. I think you've fallen into the trope that equity investing is gambling. This isn't crackpot, it's merely uninformed, and deprives countless people from improving their finances, putting their 401K into things like money markets and CD's. All you need to do is research a little information on what happened to $1,000 invested in an S&P index fund 25 years ago, vs. invested in debt instruments like CD's. Numbers don't lie.

You’re confused if you think equities carry no risk. Suggesting otherwise is strange to say the least. The rest of your post fails to rebut anything I said.

 

[Surf Monkey]

The low-wage thing is a myth. Currently, in Malaysia, they have nearly full employment. I just looked it up and unemployment there is running at 3.3%. If Apple/Foxcon wants to open a plant with 20,000 workers they will have to offer pay high enough that 20,000 people will quite their current jobs and move to Foxcon. Gone are the days you cn offer a Chinese worker any money at all and they will work. Today your company has to be the best option, espacially when you need 20,000 in a country that has full employment.

We have the same thing here in California. The minimum wage is $17.50 per hour. In the pre-covid days retraunts used to be able to find employees with an offer of below minimum wage plus tips. But today it is illegal to offer that. they MUST pay minimum wage. But you know what? No one will work for only $17.50, even McDonald's has to offer a starting pay above that. As I said, with our current low unemployment, the ONLY way to hire a worker is to motivate him to quit his current job. You have to pay more than the other guy or offer better working conditions, promotion opportunities, or pensions.

Could you imagine would Foxcon would have to offer to cause 100,000 Americans to quit their jobs and go to work for Foxcon? It will never happen.

Maybe. Maybe not. After all, there would be a range of jobs and wages at such a facility. Here in Oregon Intel has a program that hires people out of community colleges and pays them around minimum wage for entry level jobs that fairly quickly lead to better opportunities inside the company.

The issue, again, is cost of living. Wages here don’t keep up with it, so people will look for higher than minimum wage jobs. But the standard of living increases in China, India and elsewhere every year. The cost of living goes up in those locations as people there become more affluent. Eventually they stop being cost effective and companies either have to raise prices or find another vast supply of cheap labor.

What I’m saying here is that cheap labor is not a renewable resource. At some point we’ll have no choice but to pay more for these devices so that the people who make them can live a decent life.

 

[ddhhddhh2]

I feel like every time Tim Cook appears on this site it's to talk about where he's cutting costs and seldom about innovation.

I've decided to give you the 2024 Best Apple Watcher Award.

 

[bousozoku]

And you know that isn't what it would cost.

We've seen other countries force them to build in their country if they want to sell them there. I wouldn't mind seeing the USA pass something similar. Apple will never do the right thing if they aren't forced - we've seen that plenty.

Apple was one of the last personal computer companies to shut down manufacturing and assembly in the U.S.A. IIRC, they did a run of Mac Pro machines in the U.S.A. a few years ago.

Given the cost of labor in the U.S.A., and workers trying to unionize because they wouldn't accept what Foxconn would have them doing, US$5000 is a distinct possibility for an iPhone.

 

[svish]

Always good to hear about production expanding outside China

 

[Geoffb9]

These are assembly jobs. The worker do repetitive tasks that are easy to learn. No skill is required. All the skilled engineering is done in California.

The big problem is simply finding the people. Unemployment rates are very low. Both Mexico and Malaysia have rates under 5%. So to attract workers Apple will have to offer pay high enough that workers quit their current jobs. So Apple has to look for places where they can afford to afford (literally) "attractive" pay.

As for putting the assembly plants in the US. Here is the question: "What would it take you cause you to quit your job and go to work as a low-skilled assembly worker?"

Remember the suicide nets? Some workers were jumping off the roofs of tall buildings at Foxconn because they saw themselves stuck for life working at a low-skilled assembly job. They felt they could not leave because other options paid even worse, so they felt like "wage slaves" locked into meaningless job forever because they wanted the money. We in the US see the $6/hour pay as "low" but they see it as just high enough that they are trapped. Then a typical Foxconn plant might hire 100,000 people. The company typically offers free or very low cost on-site housing so they don't have a commute to work. The pay and conditions were good enough that none of the people could find anything better. But at the same time they live and work on the company plant 24*7. Some decided that jumping off the roof was a better option. Hence the nets.

Would you (yes, you) quit your current job to work at a place that needed to install suicide prevention nets? No. Because in the US you can be an Uber driver, a PhD student, or a policeman. There are better options.

SO Apple/Foxconn are forced to build plants on places where there are no better options for people. It is not so much cheap labor as simply finding 100,000 people who want to do this kind of work.

I don’t think you know what you’re talking about.

 

[ender78]

With govt help surely that’s possible? What are the downsides? As long as there is a mandate for keeping real estate costs down for workers it could work. Or is America just too expensive forever now?

Americans do not want to do these jobs.

 

[ender78]

They ran out of slave labor and need to find more. Just one more reason why Tim Cook has to go.

Wasn't all that long ago you could find a Mac Pro that was Made in USA. But Tim Cook's Apple would rather exploit desperately poor people halfway around the world than pay Americans a decent wage to do the same thing. Gross.

The Mac Pro was ASSEMBLED in the US not "Made in the USA". At the time the Intel version of the product was a very low volume product making it feasible to assemble in the USA. It has been well documented in this thread, workers in the developed world have decided they don't want to do these types of jobs.

Please don't confuse hard work with slave labour. Foxconn has lifted millions of people out of poverty. They went from gruelling farm jobs to simply difficult ones in factories.

 

[ender78]

How much would the pay be? Would the cost of labor be 30 times what it is now, 100 times?

What would you be willing to pay for your products, if Apple maintained even a minimal profit instead of ~30%?

Tim Cook has spoken in the past about the fact that the cost of labour is a small portion of the cost of their products. The issue is skills and volume of workers needed to do the work, these don't exist outside of Asia.

 

[ender78]

Aka I don’t want to pay people wages they deserve to be paid because I’m a greedy bastard and Apple being worth $3 TRILLION isn’t enough.

Have you read one comment in this thread that speaks to a labour shortage in North America?

 

[Surf Monkey]

Americans do not want to do these jobs.

It isn’t that. It’s that they won’t or can’t do them at the wage offered. Americans will do ANY job if the money is right.

 

[Surf Monkey]

Tim Cook has spoken in the past about the fact that the cost of labour is a small portion of the cost of their products. The issue is skills and volume of workers needed to do the work, these don't exist outside of Asia.

The biggest expense behind ANY product is the labor. It’s impossible to get past.

 

[Surf Monkey]

And you know that isn't what it would cost.

Nope. You’re right. It would probably be significantly HIGHER than even that.

 

[bousozoku]

It isn’t that. It’s that they won’t or can’t do them at the wage offered. Americans will do ANY job if the money is right.

Are you sure? As I say quite a lot, I can show you several closed General Motors facilities along SR 4 in Ohio where the people didn't want to work, despite their making incredibly good pay.

 

[mozumder]

Unfortunately this. We also brainwashed people into thinking college degrees are required to be successful.

So people go tens of thousands of dollars (or more) into debt for some job that makes them $60,000 a year.

But the majority of degrees will get you $120-200k/year jobs, like any programming or health care job that needs a degree.

 

[mozumder]

And those work-from-home jobs will soon be moved overseas as well.

Lots of companies have tried for decades but it hasn't really worked out well for them. The US educational system is far superior to countries like India and China.