Why Apple Products Are Made In China

Why would Apple want to produce here?

I work for a financial institution (in accounting) and we make 4% margins and thats before operating expenses. ROAs are in the 1.5% range and we are doing well. Apple makes a killing (well over 20%) selling cheaply made products in a shiny package to people that don't know any better.

And unions here have all kinds of issues. It doesn't matter how much the workers are being paid if half the union is on the bench. The trades are seeing this problem. The unions are getting higher wages for those working but no one is getting the employees off the bench.
 
Cali3350 said:
Just because someone needs X of something doesn't mean you just give it to them. Some union jobs are definitely worth the 25/hour they get. But a lot aren't. And people say "but they need that!" and the truth is it doesn't matter. If they need more then they need to spend less, have more people in the family work, or get a better job. You pay people what their job is worth. That's is the ONLY way a free market based society will work. Taping electronic board A to part B isn't worth more than 2 an hour, and that's why it will never come to America.
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Shhh! Don't you realize that most people don't want to hear the truth?

If these items couldn't be made cheaply in China, they either wouldn't be made at all or they would make limited quantities at very high prices that most people couldn't afford.

These jobs would never come to America. If companies had to manufacture here, then most the jobs would be replaced by automation, and they would just hire a few higher paid people to run the machines.
 
It's pretty hard to recover from the consist undercutting of any every single electrical component for the past 20 years.

The Chinese government won't accept the use of Chinese electrical components in American assembled electronics.
 
They should move their factories to a state like Alabama that has no state minimum wage laws. That way they can fly Chinese slave labor in, pay them the same rate and it's business as usual. They could even claim that they've brought a few hundred thousand jobs back to America.
 
steelodon said:
Well said....you would be surprised....
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Thinking about this makes me sad and realise you are right.

Even if we open up these jobs in America, the lazy unemployed slobs wouldn't take them or attempt to take them.
 
There's so much fail in this thread that I don't know where to even start.

The problem with this ever increasing desire for cheaper and more profound
electronics had to reach a tipping point.

Let me ask you, if I said to you, you could pay $1000 for a US made TV from
Phillips 10 years ago, or $200 for one made by Haier for $200 with the exact
same specs and quality. Which would you spend your hard earned dollars on?

There in lies the issue. The car mfgs are doing the same thing to thsmselves
in a sense. The prices keep going up, the floor rises, and pushes the ceiling upwards
but the wages necessary to buy those items are not also increasing at the same rate.

Eventually the market levels off and prices come down. But not in the case of Apple,
instead they just resell the same shit in a new bag to the same people. In order to
do that, they have to pack more feature into the same bag, at a lesser cost each time
to continue to drive profits upwards. They won't ever get that lesser cost here, because
our standards of living are higher. We wanted it that way and because of paragraph 1
we have this one.

In the end, is what they are doing bad? No, its how business functions, to make a profit.
Is what they are doing grossly veiled in bullshit in order to cover the truth behind it.
Probably more than we'll ever know.

Frankly, there's a lot of foreign nations that are starting to cater to ex-pats on a much
more "americanized" level than ever before. Why do you think that is? Because you
can earn 100k a year here and move there with that 100k and live for 5-7 years off it
instead of 1-2 years here. The same applies to Chinese wages, to us $12 a day sounds
like shit, to them, its paradise. You really have to look at the entire picture and compare
all things to draw a worthwhile conclusion.
 
Fact is the current system of capitalism, profit uber alles, and outsourcing is going to guaranteedly impoverish America. You keep outsourcing things bit by bit until eventually you're nothing but the boss man in the office hammering huge checks, and then the people doing the actual work realize they don't need you at all anymore and then you're nothing.

America literally cannot make cell phones or personal computers now. We do not have the factories required to produce the PCBs, LCD screens, etc.

It already happened to IBM and Lenovo. Outsource every aspect of PC design and manufacture to China bit by bit, and eventually the Chinese are doing all the work and it just becomes a Chinese company entirely.

Fact is capitalism guarantees that the average American worker will make the same as the average Chinese worker some day.
 
After glancing a few of the posts, it makes me realize how much me and my fellow Americans take for granted. There was a time that domestically produced products were superior. But those times are far behind us now. Not only is it cheaper to produce just about anything anywhere else, but many of those products are of higher quality as well. Our workforce is lazy and spoiled. This country has lived the good life for so long that we no longer can realize, let alone appreciate, the work that is necessary to keep it going for future generations. We have been in a decline since the 70's. In China, there is a hunger, a genuine need to produce. That hunger has not really existed in the US for quite some time. There isn't enough drive, enough desire, enough need amongst the workforce to strive to put forth our best effort. Yes unemployment. But even those that are struggling badly here are still doing better than the person that built that latest iPhone, or built my HTC. Americans: we're lazy and entitled. And though I would not say that our situation is hopeless, we have a lot to address before we can get back to the top.
 
Q1DM6 said:
It's not a lie, people are collecting far more than they individually pay in because everyone else is contributing. Also, 'food stamps' (cards now) are free.
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Damn, poor people get all the breaks! I wish I was poor.
 
One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”
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I saw and extended version of that story somewhere else that included the fact that basically the same thing happened in the factory making the new glass, and that factory was like half a mile away, so the assembly plant had stock and was up and making shit a couple of hours after the new glass started running off Cornings line.

Can you honestly imagine that being even remotely possible in any western country either logistically or cost effectively?

I can't.
 
Steve said:
All those "outpaced" American workers they speak of might just surprise them.
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I doubt that. All I've seen in the factories I've worked in are people trying to do as little as they can possibly get away with. Not to mention the scores of office workers that sit around all day chatting and screwing around on facebook. Americans are lazier than they've ever been, and I doubt that's just my opinion.

It's not surprising though considering we're just a bunch of slaves. I'm sure if somebody ran the numbers, it's probably cheaper to pay somebody $10/hr (and that's pretty good pay where I live [for manufacturing]) with no health insurance or anything, than it was to keep a slave back in the pre-civil war days.

Give people a job worth keeping (i.e. give them decent pay and benefits) and you'll get hard workers. But then again, the CEO's would have to take a pay cut from $30 million to $10 million and have to downgrade their Bentley to a Mercedes. We can't have that now can we? Put a damper on greed and the whole country would go to shit... :rolleyes:
 
MartinX said:
I saw and extended version of that story somewhere else that included the fact that basically the same thing happened in the factory making the new glass, and that factory was like half a mile away, so the assembly plant had stock and was up and making shit a couple of hours after the new glass started running off Cornings line.

Can you honestly imagine that being even remotely possible in any western country either logistically or cost effectively?

I can't.
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Logistically yes. The US car industry used to run similarly for some time. Now it still does to some extent, but lead times are typically longer and not as many parts come from as nearby as they used to.

In other news it looks like Foxconn will be doubling wages again over the next year.

http://www.macobserver.com/tmo/article/foxconn_reportedly_plans_to_double_worker_wages/

Not sure how many days a week/month these people work, but even if they worked 30 days a month they make closer to $12/day currently and will be making double that next year sometime. So next year assuming they work 12 hour shifts 30 days a month then they'll be making about $2/hr. If they actually work less days or hours than that which I suspect they do then they'll be making more than $2/hr. Labor costs/standard of living/cost of living all seem to be going up fairly quickly in the larger Chinese cities and manufacturing hubs the past few years. Does it still appear to suck quite a bit from things I've read? Yes. But the situation is improving.
 
There's no freaking way there's enough factory labor on an iPhone to have an significant impact on cost. From what I've seen of the guts, if they let you, I could take it apart by hand and put it together by hand in a few minutes. That translates to seconds on an assembly line total. Anything hardwired into a circuit board is made by machine.

The cost advantages are based on the business situation fostered by the Chinese government. No environmental, safety/health, and other regulations to care about. Add in China's currency fixing and its all gravy.

The last reason is that China will protect its industry though trade. China would tolerate imported Apple products for only so long until it starts closing the door.

So, you can Build in China and Sell in China and the US.
Or, you can build in the US and sell in the US.

Meanwhile China makes some similar products with all the advantages of building in China. And eventually those products make their way to US shores.

As for American industry, its still number one for converting resources into finished products. Its the most efficient at using raw material, energy, and labor to create things. Where it falls down is cost. Currency fixing is a major factor. Other labor intensive products, its labor costs. Something that with minimum wage the US will never be competitive.
 
jpm100 said:
The last reason is that China will protect its industry though trade. China would tolerate imported Apple products for only so long until it starts closing the door.

So, you can Build in China and Sell in China and the US.
Or, you can build in the US and sell in the US.

Meanwhile China makes some similar products with all the advantages of building in China. And eventually those products make their way to US shores.
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So you think one of the reasons they have them made in China is to make it easier to sell in China? A country where they have practically no market share whatsoever? A country where 90% cant afford the product being made?

Apple dont give a flying fuck about selling iphones in China.
 
Cali3350 said:
Unions guarantee far more to assembly workers in the US than they are worth.

Putting part A into part B isn't worth $12 / hour plus benefits but that's what it would cause in the US. The US really has no one to blame but itself for all these circumstances.
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There's more to wage compensation that skill level. Plumbing has some skill level, but they often get paid well above because they end up having to work in other people's crap, literally. And if factory doesn't seem like a problem, you should read about Sisyphus. His torture in hell was to do the same thing over and over again with no sense of accomplishment. Putting tab A into slot A in a product that make take hundreds of steps pretty much dissociates you from any sense of accomplishment.

Some may be overpaid, but paying people for jobs purely from skill qualification and not comprehending how much the jobs sucks is a great way to scrape the bottom of the employee barrel and have high turn over. And when one works deliberate or accidental neglect can mess up days or weeks of production, that can be a disaster.
 
raz-0 said:
How little will an American worker work for, and how hard will they bust their ass? Ask amazon with their crappy warehouses. It's pretty cheap and pretty hard.

Lets say it's $8 an hour, and you have a decent amount of churn. That's not even the problem. The problem is that you have $8 an hour, plus payroll taxes, plus SS, plus unemployment insurance, plus any benefits. So now it is significantly more than $8 an hour. Then you have the increased cost of facility construction, increased cost of regulatory compliance for the manufacturing facility and process. All the money you might save on shipping product to it's largest market evaporates when you now have to ship all the components here as we simply do not have the secondary suppliers to domestically source all the bits. You'd simply lose a TON of profit, so it isn't happening. Blaming the American worker is a bit of a red herring though. Once you step outside of chip manufacturing, our high tech manufacturing infrastructure is nearly nonexistent.
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Working in the manufacturing/rapid-prototyping industry myself, this is spot on (for almost all manufacturing). Almost all of our work is being sent over to brand new plants in Brazil, China and other nations for parts to be cast/machined and assembled. A lot of the industry has become stagnant in the US to the point where its way more cost effective (besides just wages) to have a company in another country do it. They're usually faster, pump out decent enough products (some of the sand castings we've been getting back have been phenominal compared to what we're used to seeing from companies in the states), way more competitive and in some cases have better technology (unless we want to wait for a better/busier shop to find the time to fit us in).

It's easy to blame businesses and/or Unions/the American worker... but thats a bit of a cop out. It's almost like a run away train. It's a vicious cycle that keeps feeding itself.
 
Disposed said:
So you think one of the reasons they have them made in China is to make it easier to sell in China? A country where they have practically no market share whatsoever? A country where 90% cant afford the product being made?

Apple dont give a flying fuck about selling iphones in China.
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And what is 10% of a Billion people?

Realize that China is considered an up and coming market, no. So, what happens when that becomes 20% or 30%?

There's no question in the Stockholder's minds that China's market will eventually be as big as the US market even when a smaller percentage can't afford it. And how are the percentages of people in the US marketplace doing these days?

So you can either neglect a marketplace where products can be made for cheaper and eventually you'll have to face competing products made for that market brought to the US market. Or you can dominate that market there, too. Taking the oxygen away from future competitors and expanding your sales.
 
The Holy Apple would gladly move its manufacturing to the United States so long as it is recognized as a legitimate religious institution and be exempt from corporate taxes.
 
Trimlock said:
I can believe this to an extent. If these jobs opened up again in the US you would see a spike in people applying for classes in these electronic fields. It would cost more but it would still be a better product I would like to think.
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You mean like all those college grads with CS degrees? Enrollment in CS programs has gone down every year for the past decade yet a CS degree guaranrees employment.

when I worked at MS years ago BillG and other tech CEO's were speaking at universities to push for improvements and strategies to fill seats.
 
jpm100 said:
And what is 10% of a Billion people?

Realize that China is considered an up and coming market, no. So, what happens when that becomes 20% or 30%?

There's no question in the Stockholder's minds that China's market will eventually be as big as the US market even when a smaller percentage can't afford it. And how are the percentages of people in the US marketplace doing these days?

So you can either neglect a marketplace where products can be made for cheaper and eventually you'll have to face competing products made for that market brought to the US market. Or you can dominate that market there, too. Taking the oxygen away from future competitors and expanding your sales.
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+1

Not sure where jpm has been but China's economic growth has out paced the rest of the world for years. By the time my 5 year old graduates HS China will be the #1 economy in the world.
 
seamusmc said:
+1

Not sure where jpm has been but China's economic growth has out paced the rest of the world for years. By the time my 5 year old graduates HS China will be the #1 economy in the world.
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Meant Disposed instead of jpm.
 
8du8 said:
A lot of people dont realize China has a history of being good at manufacturing, and in fact I think China for a time, even forgot that they were good at it. But now they are kicking the west's ass again when it comes to innovations in manufacturing.

It doesnt matter how many unemployed willing to work people we have in this country, China is simply out pacing us and not because they have cheap unskilled labor.
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True it's because it not just because it has a lot of cheap unskilled labor with no recourse, but to work for peanuts with long hours and few if any benefits. Then add in the cheating that goes on with their currency and few if any environmental laws, building codes, etc.
 
Well, eventually one of two things will happen: The Chinese will start demanding higher pay as costs of living begin to rise. China will eventually come in line with other developed nation's avg pay (a long, long process for sure though). Or, so many jobs like these will never come back the US, most Americans will no longer be able to afford these products and sales will drop through the floor resulting in the layoff of millions of Chinese who work at these camps.
 
I was about to write a disertation on this but I read the article and the work was already done for me :)




The reason: there's a very real tradeoff between what's good for workers and what's good for business. When push comes to shove, business wins -- which is why Apple's American employees enjoy comparatively nice perks while employees of its supply chain partners live in 8,000-strong dormitories, ready to be woken up at midnight to start a 12-hour shift making new parts for an iPhone that received last-minute design changes from California.
Imagine trying to do the same with an American worker. Unions would never stand for it, obviously, and chances are the rest of the family unit wouldn't, either.
My point is not to illustrate the benefits and drawbacks of unions, or even what's fair; rather, I'm trying to illustrate a landscape in which American companies can go overseas for greater flexibility, lower price and sheer speed. So long as there are nations in this world willing to do work others aren't, outsourcing will exist. In the capitalist system, businesses can't win in the free market unless they exploit every advantage.
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What a load of crock.

One thing I can't stand is when people belittle my intelligence by blatantly lying to my face.

Having lived overseas for much of my life, in SE Asia specifically, these factory workers generally have the IQ of a chipmunk. Many are fresh off farm villages with little to no education, but a factory job in the city ultimately still pays so much more than the poverty in the fields. So they are highly motivated and desperate, and thus will work under harsh conditions for long hours for next to nothing.

And that is why they are desired. Americans could do the job much better and likely with higher quality control and efficiency per person, but they can't compete on costs and that is the bottom line. Opportunity cost tells us that perhaps its not even a bad thing, but be honest Apple.

Apple just doesn't want to be blunt and say "Yes, we use virtual slave labor to improve our profit margins".

And yes, I was recently on unemployment in the first time since I started working 12 years ago, and with Foxconn employees averaging under $2 an hour wages, I made nearly six times on unemployment in Texas than Chinese workers do putting in a 40hr week (although granted they work far more than that).
 
K1tty said:
Well, eventually one of two things will happen: The Chinese will start demanding higher pay as costs of living begin to rise. China will eventually come in line with other developed nation's avg pay (a long, long process for sure though). Or, so many jobs like these will never come back the US, most Americans will no longer be able to afford these products and sales will drop through the floor resulting in the layoff of millions of Chinese who work at these camps.
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That's not how it works.

Right now we have very high unemployment, meaning that many that should be working are sitting on there hands contributing nothing and in fact placing a burden on society. Because of the lack of jobs, we also have underemployment and unemployment that doesn't show up in government statistics, because it includes people that aren't working as many hours as they could/should or aren't working at all because of the lack of fruitful opportunities (wives/girlfriends/teenagers).

Also, as the Chinese pay increases, so does their own spending power, so they will consume more and more products as well. That means they are buying televisions, cars, etc, and there are a hell of a lot of Chinese making that a booming market in and of itself. So there may be a decline in the disparity between American and Chinese wealth and standard of living as one is brought down and the other raised up, as one would expect in a global economy, but total purchases of goods and services if anything are likely to increase.
 
Ducman69 said:
What a load of crock.

One thing I can't stand is when people belittle my intelligence by blatantly lying to my face.

Having lived overseas for much of my life, in SE Asia specifically, these factory workers generally have the IQ of a chipmunk. Many are fresh off farm villages with little to no education, but a factory job in the city ultimately still pays so much more than the poverty in the fields. So they are highly motivated and desperate, and thus will work under harsh conditions for long hours for next to nothing.

And that is why they are desired. Americans could do the job much better and likely with higher quality control and efficiency per person, but they can't compete on costs and that is the bottom line. Opportunity cost tells us that perhaps its not even a bad thing, but be honest Apple.

Apple just doesn't want to be blunt and say "Yes, we use virtual slave labor to improve our profit margins".

And yes, I was recently on unemployment in the first time since I started working 12 years ago, and with Foxconn employees averaging under $2 an hour wages, I made nearly six times on unemployment in Texas than Chinese workers do putting in a 40hr week (although granted they work far more than that).
Click to expand...


The sad thing is, it's so easy for Apple, other corporations and the government to pull the wool over most American's eyes because the majority have had no exposure to anything outside their little bubble. Only 30% of us have passports.
 
Ducman69 said:
That's not how it works.

Right now we have very high unemployment, meaning that many that should be working are sitting on there hands contributing nothing and in fact placing a burden on society. Because of the lack of jobs, we also have underemployment and unemployment that doesn't show up in government statistics, because it includes people that aren't working as many hours as they could/should or aren't working at all because of the lack of fruitful opportunities (wives/girlfriends/teenagers).
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Yeah, true. I wasn't arguing this.

Ducman69 said:
Also, as the Chinese pay increases, so does their own spending power, so they will consume more and more products as well. That means they are buying televisions, cars, etc, and there are a hell of a lot of Chinese making that a booming market in and of itself. So there may be a decline in the disparity between American and Chinese wealth and standard of living as one is brought down and the other raised up, as one would expect in a global economy, but total purchases of goods and services if anything are likely to increase.
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This is true only to an extent. The factory workers will spend more as their wages rise etc, however they will not be able to support the current volume of production when it comes to these electronics. Basically a company won't be able to only sell to its workers and turn a profit.

"Apple’s quarterly revenue from China was $7.9 billion, about 20 percent of total company revenue. Furthermore, that was triple Apple’s China sales in the same period a year ago. In contrast, Apple’s China sales during its last fiscal year were about 12 percent of total revenue. Two years ago, Apple sales in China were 2 percent."


Even though the percentage is going up, 20% isn't going to sustain the entire business.
 
The pay picture is one insignificant side.
The hoops a company has to jump through to start up, restrictions placed on it by "the state"
isn't worth it. If you can go around the DEP/EPA/OSHA/ and other associated groups that are
there to protect us. Well guess what,let's make it in anywhere but the USA!
 
You can stay hungry and rage over jobs no longer economically viable in the U.S. or you can adapt and do something else and get paid.

Compete with knowledge, not mindless widget assembly.
 
We shouldn't hate apple for wanting to make big profits at the expense of humanity. You would do the same if you could. don't lie.



wtiger said:
True it's because it not just because it has a lot of cheap unskilled labor with no recourse, but to work for peanuts with long hours and few if any benefits. Then add in the cheating that goes on with their currency and few if any environmental laws, building codes, etc.
Click to expand...

yeah, chinese made shit seems to fall apart. Apple is one of the exceptions.
But chinese shit is god awful in quality. I would never stay in one of their built-overnight high rise buildings.

I used to poke fun of made in mexico shit, but now I would general take made in mexico over made in china.
 
This could be fixed if the US passed a law that states a US based company must pay HIGH import fees on products manufactured outside of the US. This wouldn't change anything for foreign companies that already import into the US. If a company like Apple decided to up and leave the US then the US could have a minimum time built into the movement of a company. If a company was originally US based but moved to China to make products and save on taxes/cost then they would still pay the HIGH import fees for say 10 years. Also government could offer incentives to help pay wages, this would be a better use of their money instead of funding bailouts that ended up in executives pockets as annual bonuses.
 
QUOTE=Q1DM6;1038782674]We don't have factories with 300,000 people in them. It'll NEVER happen in America. Ever.[/QUOTE]

teclado said:
The real issue here is that China allows their workers to be treated like cattle. This has enabled us first-world countries to enjoy products at an unrealistic price-point, thereby creating unrealistic expectations as to what those products should cost, thereby making it impossible for a "Made in USA" product to have a chance. If we really want to bring back "Made in USA" we'd have to settle for super expensive products that only the rich can afford. Ironically, it is our own greed of everybody wanting to have the best for dirt cheap that has killed "Made in USA."
Click to expand...

+infinity for the both of you.

"I want the best of the best at top tier quality for dirt cheap prices, and I will cry, bitch, and moan as loudly as I can until I get it."

Sure, China will give you that. America won't.

"I want the best of the best at top tier quality for dirt cheap prices and 'Made in the USA', and I will cry, bitch, and moan as loudly as I can until I get it."

Sure, you can get that, but it'd require tossing out alot of laws and standards that were designed to keep American workers from being treated like Chinese workers (which means we're back to the first answer).

This attitude of wanting the best for nothing is prevalent even in this very forum and others like it, what with the CONSTANT bitching about the prices of current graphics cards.
 
jpm100 said:
There's more to wage compensation that skill level. Plumbing has some skill level, but they often get paid well above because they end up having to work in other people's crap, literally. And if factory doesn't seem like a problem, you should read about Sisyphus. His torture in hell was to do the same thing over and over again with no sense of accomplishment. Putting tab A into slot A in a product that make take hundreds of steps pretty much dissociates you from any sense of accomplishment.

Some may be overpaid, but paying people for jobs purely from skill qualification and not comprehending how much the jobs sucks is a great way to scrape the bottom of the employee barrel and have high turn over. And when one works deliberate or accidental neglect can mess up days or weeks of production, that can be a disaster.
Click to expand...

And despite those drawbacks it's still not worth 12/hour. Monotony doesn't count as a skill. It counts as a replaceable piece.
 
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