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ok i was slightly off, the original estimate was $180 but now it is pegged at $207 for the 16GB model:

original estimate of $180.15: http://money.cnn.com/video/technology/2012/09/24/t-ts-iphone-5-teardown.cnnmoney/

Revised estimate: http://www.cnbc.com/id/49086627/Apple_s_199_iPhone_5_Costs_207_to_Make


$649-$207 = $442

$442/$649 = 68% profit margin for the base model 16GB

to increase the memory to 32GB costs apple $10. since the iPhone 5 32GB model sells for $100 more: $749-$217 = $532. $532/$749 = 71%

per iSuppli's article, the 64GB model costs just $238 yet sells for $200 more than the 16GB model and $100 more than the 32GB model. $849-$238 = $611. $611/$849 = 72%


these percentages do not include shipping, marketing, credit card payments, overhead of Apple Stores, etc as these costs are not compared between companies when looking at an individual product's profit margin.
Please stop saying things as if you know anything about accounting. :rolleyes:
 
Please stop saying things as if you know anything about accounting. :rolleyes:

as they say - "it's simple arithmetic" ;)

i am by no means an accountant, but as a product development engineer i can tell you that when the profit margin of comparable products across several companies are compared, those other costs as i mentioned above are not factored in. those costs do get incorporated, just not at the product level for comparison

in our group we do a lot of bench marking against the competition (as they do to us), and not once has overhead, marketing budgets, shipping costs, ever come into the equation when we are comparing product to product.
 
Time to bring the jobs back to the US, Mr. Cook!!

Even if those jobs are brought back to the US, there would probably be very few people willing to do these sort of jobs, and/or the factories will invest heavily in automation to offset spiralling labour costs. Either way, I don't see this having a significant impact on employment.

No. In China human labour is cheaper than automation. Especially for fine detail work like this.

I also suspect this is a political issue. The Chinese government will likely oppose any move that may result in higher unemployment, for fear of the social issues that follow. That's why they turn a blind eye to these factories - they keep people employed and off the streets. :eek:
 
There will probably always be an issue when a company rolls out a product on a strict timeline and into the millions of units. I wrote in this forum after product launch that iPhone defects were a result of manufacturing problems and all I got was, "what defects?' from Apple apologists. Now that defects are recognized, we're seeing a reason to avoid being an early adopter. It used to be about software bugs. Now it's about manufacturing bugs. As to Chinese workers messing units up, it's about Foxxcon management. Nobody above the assembly line workers kept an eye on what was going on while it went on. Management's thoughts were about, "crap, if these don't go out on time, my job is toast." "Keep a blind eye on this and see how it shakes out."
 
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China Labor Watch reports (via Gizmodo) that thousands of Foxconn workers responsible for assembly of the iPhone 5 have gone on strike today, objecting to strict enforcement of increased quality control standards.According to the report, Apple and Foxconn had raised quality control standards to address issues related to scratching and other blemishes on the iPhone 5 casing, but the new standards made it extremely difficult for workers to produce phones satisfying those requirements given the equipment and training available to them.

The issues have reportedly resulted in significant tensions between production line workers and quality control supervisors, with several skirmishes having broken out in recent days resulting in injuries and damage to production facilities. In addition, Foxconn reportedly eliminated holiday vacations for workers, perhaps referring to last weekend's Moon Festival, and the company has reportedly "turned a deaf ear" to worker complaints.

Apple and Foxconn have been struggling to keep up with demand for the iPhone 5, with new online orders through Apple still being quoted 3-4 week shipping estimates. Customers have also been complaining about scratching issues, particularly on the black model, with some customers reporting that their devices have arrived scratched right out of the box.

Article Link: Foxconn Workers Reportedly Strike over iPhone 5 Quality Control Demands

They aren't striking over quality demands, they're striking over a lack of appropriate training (and probably being fired for not doing things correctly when they weren't even trained)

Learn to read critically, jeez
 
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If the products are not defect free or they can't keep up with the quota then hire workers that can. Apple cannot afford any production loss or slow down.
 
we truly live in a disgusting world.

This is no worse than slave labor with the blacks. Apple has a high demand of quality, yet the same amount of people are making much more product than years ago.

Anyone complaining about iphone quality is a spoiled piece of ****, im sorry. I'd like to see one of you work the intensive hours of those people. They must have the most amount of stress than any other job. Yet some of you have the nerve to complain about a little chip in the aluminum or some other "loose" part of the phone. how about you go to china and start working for them? Go work ridiculous monotonous hours, same thing over and over again, every day, with high quality demands, getting paid ****. Be thankful with what you have. You're not going to get any better. Humans can only do so much.

Give me a break and ****ing deal with it. We all have much more important things to worry about.... or maybe we dont, being spoiled americans.
 
F@#% if these guys don't want to do the work, get someone else to do it. The country has 1.5 billion people.... we just need a couple of thousand that can make enough phones for me to get mine.

Or apple can take a hit on their profit and bring these jobs to 'Merica god damnit!

F U :apple:
 
There are two main holiday periods in China: Spring Festival and Golden Week.

The past week has been Golden Week. It's the traditional week for family outings. During Spring Festival, we go visit our family and spend time with our parents. During Golden Week, we generally go for our annual vacation.

Being asked to work Golden Week would cause a riot anywhere in China. Chinese workers (other than emergency workers) usually aren't asked to work Spring Festival or Golden Week at all. Being asked to do so is pretty much unheard of.

Yeah big deal man. I'm Chinese too. I've had to work on Thanksgiving, Christmas, Chinese New Year, and my birthday all in the same year, multiple years.
 
If the products are not defect free or they can't keep up with the quota then hire workers that can. Apple cannot afford any production loss or slow down.

True..

On the contrary, why did it let get this bad ?

I mean they must of known..... Maybe then, everything would have been solved months in advance, given they already known that Apple sold iPhones within 24 hours.

Then again... this sounds exactly like my mates boss....

People do their best, but obviously to Apple. the best is not good enough....


Do you have to be dead before Apple notices ? Apparently so. :apple:

All Apple care about its its users. never the work people........ This proves it. no matter how much they "try and back it up"
 
People do their best, but obviously to Apple. the best is not good enough....

Letting obviously damaged iPhones full of nicks and scuffs slip past QC is hardly doing their best.

They need to hire more workers or be honest with Apple and say they can't meet the higher demand, at which point they need to work slower and we'll just wait longer so we can get defect-free iPhones.
 
What the people criticizing the workers fail to realize is that you are those workers. You don't think you are but you are. Speaking against them is speaking against yourself. The conditions in China were predicted a long time ago and they'll be here soon enough. It's inevitable. Then, it'll be some other rich country pointing their finger at American workers saying the same **** you are saying now about the workers in China.
 
Maybe I'm wrong. The floors seem to not be made of dirt, at least here.
Somehow I don't believe this to be true, but if proven I'll take it. I find it hard to believe that it's the standard quo, again per the Iron Ricebowl requisite. Pictures I've seen look much more like standard living for that country. Where's the picture from?

To pass these laws you need an actual political organization. So yes, Unions can have political motivations, so do entrepreneurs. What's wrong with that?
What's wrong is when that organization ignores the people it's supposed to represent, often in the face of what's best for the industry and growth. Look at manufacturing in the US and how unions "helped" that along. What's also wrong is when union membership is mandatory, especially when they charge fees. If it was an optional political organization that didn't have collective bargaining (aka just a lobby group), fine. But to give it extra power? Demand membership? Have near zero say in actual policy making? Tell you how to vote? Be militant against non-union members? (ala Philadelphia construction unions, especially ~20-30 years ago) Be at it's whims and the decisions made for you? We've already seen what that's done for this country.

Politicians could have easily enacted said laws before. Sadly, our country is devoid of any politicians of merit... I'll refrain further so this doesn't get zapped to PRSI.
 
Somehow I don't believe this to be true, but if proven I'll take it. I find it hard to believe that it's the standard quo, again per the Iron Ricebowl requisite. Pictures I've seen look much more like standard living for that country. Where's the picture from?


What's wrong is when that organization ignores the people it's supposed to represent, often in the face of what's best for the industry and growth. Look at manufacturing in the US and how unions "helped" that along. What's also wrong is when union membership is mandatory, especially when they charge fees. If it was an optional political organization that didn't have collective bargaining (aka just a lobby group), fine. But to give it extra power? Demand membership? Have near zero say in actual policy making? Be at it's whims and the decisions made for you? We've already seen what that's done.

Politicians could have easily enacted said laws before. Sadly, our country is devoid of any politicians of merit... I'll refrain further so this doesn't get zapped to PRSI.

Unions demand membership in order to control the cost of labor. Why does Rolex control the amount of watches it releases each year? Because they know saturating the market will decrease the watches value. Unions establish a value for the labor its workers provide and membership prevents workers from working for far less than what the collective is willing to sell their labor for. This keeps the cost of labor high which benefits almost everybody. On the surface it doesn't seem like the one's employing labor benefit from the costs of labor meeting the cost of living but look to China and you'll see how high labor rates to meet standards of living actually benefit the factory owners. If the workers were paid more we probably wouldn't see a halt in production and a loss in profit. So, both labor and employer benefit from union membership. That is why union membership is often required of workers entering into a unionized company.
 
You'd think with all the innovation that goes into smartphones these days, the manufacturing process could be a tad more automated.

I mean really, why do we still need people assembling these things?

//Yes I understand it's a large resource for employment, but clearly working conditions aren't particularly humane.

Many processes in the manafacturing are done with robots and machines, the humans basically watch over the machines and put a few screws in here and there as well as test it out.

No working conditions in "third world" countries are "particularly humane".

----------

Unions demand membership in order to control the cost of labor. Why does Rolex control the amount of watches it releases each year? Because they know saturating the market will decrease the watches value. Unions establish a value for the labor its workers provide and membership prevents workers from working for far less than what the collective is willing to sell their labor for. This keeps the cost of labor high which benefits almost everybody. On the surface it doesn't seem like the one's employing labor benefit from the costs of labor meeting the cost of living but look to China and you'll see how high labor rates to meet standards of living actually benefit the factory owners. If the workers were paid more we probably wouldn't see a halt in production and a loss in profit. So, both labor and employer benefit from union membership. That is why union membership is often required of workers entering into a unionized company.

There are no unions in China.
 
Many processes in the manafacturing are done with robots and machines, the humans basically watch over the machines and put a few screws in here and there as well as test it out.

No working conditions in "third world" countries are "particularly humane".

----------



There are no unions in China.

You didn't read my post correctly. Read it again. Slower.
 
It's really appalling to read so many callous comments. Makes me think that a lot of the users of this form are a bunch of one-percent-ers or wanta-be types.

Brazil had it right. They put a giant tarrif on Apple products and told them, "you want our market, you re-locate here in Brazil or pay a big tarrif." Apple built plants in Brazil because $1200 iphones slowed sales. We need the US president and congress to do that for the US market as well.

The same should be true for all electronics, actually everything.

All the free-trade talk is crap, it's just glorified slave labor conditions. If anything good comes of Apple and other companies relocation in China it would be a workers revolution that throws out the now-phony Communist Party and installs something that is really democratic and really socialist.

As for robots doing the work so your iphones are available, just remember you too can be replaced. Already even intellectual jobs, research jobs are moving overseas. We need solidarity with the workers that are being exploited, not whining.

Yes agreed these comments blaming the workers are stupid ... obviously made by people who do not understand what is being asked from them in the factory (even ignoring the poor working conditions, it looks like they were simply asked to produce an impossible amount of phone compared to the means they were given to do it - so obviously this affected quality).

However I wouldn't like the rest of the world to follow the path of Brazil ... last time all the countries in the world tried to fix an economical crisis with protectionism, it didn't turn out very well. I would't be shocked by some kind of added sales tax depending on the labour laws and environmental regulations of the production country, but both technically and politically it would be very difficult to implement I guess.
 
If the products are not defect free or they can't keep up with the quota then hire workers that can. Apple cannot afford any production loss or slow down.

Good luck finding employees ANYWHERE that don't hope for improved working conditions. If Apple were to hire replacements, see how long they last before becoming incensed. There's likely a positive correlation between working conditions and quality control...might explain why my retina MBP screen had to be replaced.

Perhaps Apple should instead take the lead amongst technology companies and announce later launch dates or wait until a large batch of phones already exists before declaring their product available. I'd rather wait another six months for each Apple product if it meant workers weren't treated like slave labour. It was actually due to a recent Guardian article describing conditions in Foxconn plants during iPhone 5 production that made me decide against purchasing it. In some ways, I feel ashamed about the conditions people were working under to build my current Apple products. These people need more than 3 seconds per task, and deserve regular breaks and the holiday time their due.
 
Is it possible that QC is in fact catching the nicked and scratched devices before they are package but choosing to pack them anyways due to the pressure from Apple to meet orders?

I think it is quite likely...

Most articles mention the QC guys were beaten up by other workers. Maybe the assembly line workers got fed-up with seeing a large number of phones refused, knowing that they are already overloaded and for each refused phone they will have to manufacture an extra one to meet Apple's expectations. So they just went to the QC guys and told them "now you accept the all stupid phones as long as they turn on, or we kick your ass".
 
Bring those jobs back to America, Apple. Put the people to work here who buy your products. We have a saying here, in America we have no art...we do everything as well as we can.

While these aren't the jobs I'd like to see return to the US, your post demonstrates a complete lack of math skills. If you tried to source every bit of every last component within the US, it would drive the cost up more than basic construction, which is what Foxconn does now. It's really tiring reading gross exaggerations from people who have absolutely no clue. There are a lot of factors in pricing anyway. A company will balance out their goals in terms of short term profits and overall marketshare when setting pricing. Costs mainly affect what they must charge to turn a profit on something. They don't directly determine final market pricing. People were complaining about the prices of HDDs after the floods. Western Digital and a few others were posting huge profits while pricing was still up. A number of people on here didn't understand that. I'm simplifying it quite a bit as there are other factors, but just deciding everything would double in price by relocating final assembly isn't much of an assessment.
 
Anyone complaining about iphone quality is a spoiled piece of ****, im sorry. I'd like to see one of you work the intensive hours of those people.

[...]

Give me a break and ****ing deal with it. We all have much more important things to worry about.... or maybe we dont, being spoiled americans.

So your reasoning is: accept the defects on the product because the workers assembling them are badly treated?

Think about the message you are saying to Apple ...

It sounds like: "It is OK to sell products at a very high price, manufactured at a very low price and mistreating workers (which is the likely cause of the defects) in order to maximise profit. Consumers will feel sorry for the workers, accept the defective products and let Apple keep its large profit margin while delivering sub-standard products and having unreasonable expectations for assembly line workers."

I don't want to be a smart ass, but is it really the message you want to send? :-s
 
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Training and conditions

I am truly dismayed...

Scanning through the many comments I'm reading from too many people not caring about hours, conditions or poor levels of pay - but instead all they care about is getting their phone on time.

Firstly the workers quarrel is that they don't have the right training or equipment to complete the job to the quality required.

I don't see a report that they don't want to deliver on time and to standards... indeed I'm guessing they have great pride in their work. This is a great example of management not understanding the needs of production yet demanding more without providing resources. (I see it all the time in my field of work).

Let's put aside the actual conflict and look closer at our morals. Comments like "if they don't want the work there are others who will do it" and the desire to get their phones on time ("just get me mine" was one comment I believe,) brings into question our sense of humanity and perspective.

If the wages are so low that workers need to work 7 days a week and pull heavy overtime then we can no longer argue that salary is related to a lower cost of living.

If their wages are so low then a small increase for them would be a small increase in % to the cost of a phone, if these increases were passed on directly to the workers. Apple has a huge influence on it's manufacturers and can implement an action that would accomplish it.

I would certainly pay a few extra £££ if I knew that poorly paid workers were to be better off.

In the UK, one of our shopping chains has school uniforms at just £4 Just thing how low the workers are being paid fort that. Now if the price was £5 and the £1 increase was being passed on just imagine how that might double a worker's salary.

Our greed to save a £ or two when we'll happily waste it elsewhere is concerning. Our assumption that if workers across the world are turning out products below quality then it must be because they don't care or are just trying it on... well then I'm dismayed by this automatic assumption by some.

And to hear comments from some that their main concern is that they just get their shiney new phones on time - well take a look at your priorities.

Give the workers the training and resources they need and deserve. Stop demanding better quality when that training is not up to scratch. Whilst you're at it let's have a rethink on pay and what the end price should be.

I wonder if a specially marked phone that was £10 more but that £10 was guaranteed to go to the workers' salary, I wonder if people would buy that phone... I would.

I have assistants working with me. If they aren't familiar with a piece of kit then I'll show them how - and only then will I expect them to work it properly. In my field there are many more assistants than positions - it's a competitive market and if I wanted I could pay the least possible £££. Instead I pay more than the average, because I am well paid and my company can afford to.

If you can afford an iPhone 5, then I'm guessing you can afford to pay a little more too.

Glad to hear from so many that support the workers demands - but sad that there are too many who just want a new toy in their pocket - despite the "real" cost.
 
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