Hi Amir,
Yes, well aware of many of the factors of what it takes to bring a product to market, distribute and market it, and the differences that exist when comparing how revenue streams are generated and sustained across companies manufacturing consumer goods. And though I appreciate the points you raise above, they neither address the opacity of the supply chain nor the rights of the workers who perform final assembly, both of which make up only a tiny fraction of the actual costs of production.
In the infographic below, we can see the final assembly and testing, carried out by workers in factories that are non-automated, is equivalent to 5.53% of the total manufacturing cost (or $12.62 of $228.07) for an iPhone 6, while final assembly and testing for a Galaxy S5 is equivalent to 5.01% of the total manufacturing cost (or $10.80 of $215.44). However, given each worker at Apple’s Pegatron factory in Shanghai earns only $1.60 US an hour and 62% of those workers had over eighty-two hours of illegal or forced overtime per month, it’s clear these workers are not remunerated sufficiently enough in order to avoid having to work overtime to earn a living wage, an exploitation of their labour rights.
(...)
Were these workers paid the average minimum wage of $7.25 US per hour, and worked forty hours per week in which their rights were protected, final testing and assembly would jump to $57.18 for an iPhone 6, or 25.07% of the (current) total manufacturing cost versus 5.53%, with 51% less iPhones being produced each week. Taking into account these two variables, were the iPhone produced in America in which workers were compensated at the allowable minimum wage working forty hours per week, the manufacturing cost of an iPhone would then jump to a total of $411.56, or nearly double its current manufacturing cost.
That is, if Apple sought to maintain its profit margin for each iPhone 6 sold based solely on increased manufacturing cost (i.e. labour), the retail price would jump from $649 US to $1171 US. If they wanted to maintain supply for current demand by increasing workforce output by 51%, it would retail for $1768.96, a 280% increase over its current RRP solely in order to address labour costs. It’s just maths. And that’s not even taking into account the compensation nor working conditions abuses of those mining the cobalt that’s essential to every battery installed in every phone.
Like I mentioned in my previous two posts, of all the costs associated with the manufacture of a smartphone, the ones that come at the greatest human cost are the ones related to those who mine the cobalt for each battery, and those who spend an average of 60.5 hours per week working for $1.60 US per hour doing final assembly. To bring up issues of the sales channel, target market, market size and elasticity, is to choose the variables in which human rights are least relevant, given that the only way an iPhone costs $649 retail is to outsource the greatest burden of labour to those whose voices are suppressed and rights are abused.
That many of our high-end audio components are not made is such a way, or at the least, have a more transparent supply chain and manufacturing process, means the consumer is given a far greater variety of choice in whom they select should they wish to look for companies with a degree of ethical and sustainable business practices, and accordingly, a commensurate increase in price relative to consumer goods in which the supply chain and manufacturing process is opaque, and ethical abuses are rife.
These additional links below may provide you some context for my comments, should you choose to click on them.
853guy
http://spectrum.ieee.org/static/interactive-apples-and-samsungs-changing-smartphone-recipes
https://www.wired.com/2014/12/apple-isnt-one-blame-smartphone-supply-chain-abuses/
http://digitalethics.org/essays/ethical-smartphone-oxymoron/
https://www.amnesty.org/en/latest/campaigns/2016/06/drc-cobalt-child-labour/
http://fortune.com/2017/03/03/apple-cobalt-child-labor/
http://fortune.com/2016/08/26/apple-pegatron-abuses/
https://news.vice.com/story/apple-p...als-to-make-iphones-it-just-isnt-sure-how-yet
