Apple Cuts 0.7 % of iPad Profit to Give Factory Workers Raise

Tagged: apple, iPad, Computer Hardware, Technology
Source: Daily Tech - Read the full article
Posted: 6 years 21 weeks ago

It took a string of suicides to spur it to action, but Apple is finally taking a big step towards trying to ensure that the workers who build its bestselling iPads, iPods, and iPhones enjoy a decent standard of living.

Apple's products are almost entirely manufactured by Foxconn, a China-based unit of Taiwan's Hon Hai Precision Industry. Foxconn builds the sleek devices at its Shenzhen plant in Southern China. While many companies (Microsoft, HP, Dell, Nintendo, Sony, etc.) utilize Foxconn's manufacturing services, the Shenzhen facility primarily serves Apple -- and it's also the site of all of the recent suicides.

The suicides were perhaps foreshadowed by an internal probe by Apple that revealed that several of its international manufacturing partners were committing abusive employment practices, such as using child labor or demanding unpaid overtime. According to reports, the latter was particularly common-place at the Shenzhen facility.

According to a report by Chinese news organization Sina, Apple has now quietly committed a dramatic gesture, offering to finance the majority of the 20 percent raise in pay to the Shenzhen workers. The raise was long promised to workers, but had remained undelivered for some time now.

The 20 percent raise will cost Apple a little, but not very much. It is estimated to raise the costs of labor for the iPad from 2.3 percent of the cost to 3.0 percent of the cost. Apple still looks to make hundreds in profit off of each unit sold (breakdowns estimated Apple makes at least $200 per iPad sold).

For the Foxconn workers living in the factory city of Shenzhen, though, the raise will make a world of difference. While some will question why Apple didn't push for higher wages in the first place, it's important to appreciate that it is at least taking action now. One can only hope that HP, Dell, Microsoft, and others step up to the plate and offer to subsidize similar raises at their manufacturing locations -- even if they haven't been struck by the spate of suicides that occurred at Apple's plant.

Apple has not yet officially acknowledge the report, though it has previously stated that it was concerned about the working conditions at Shenzhen and that it was evaluating its options.

In other news, a fire broke out at the Shenzhen plant this week. It reportedly was unrelated to the suicides. The fire did not do any major damage to equipment, according to reports, and is not expected to impact Apple's production schedule.



d3uS2029's picture
Joined: 03/20/2003
Posts: 291

+1 apple? for what? a 0.7% raise? Here in canada we get a minimum of 3% raise every year in april.  While i know its a little different there because of different wages but seriously it cant be more then a few cents extra per hour.


Did you read part of that article that states this? "Apple makes at least $200 per iPad sold"

At least $200? they are ripping off its own customers and apple should be ashamed of themselves. But really, Steve jobs is kinda smart since he knows there is so many suckers who will pay more money for useless devices like the iPad.


edit: Because i said the ipad is useless, i dont want to read reply's to my post regarding why the ipad IS NOT useless... mainly because you wont change my mind but also to stay on topic ;)

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Andreas Hofer
Andreas Hofer's picture
Joined: 10/31/2009
Posts: 121

Our local news agency, the APA, reported yesterday that Apple Inc. has already sold over 2 million units. At 500 dollar/euro per unit there is no need for concern that such measures would harm profits in any way and at the same time good PR is always welcome.

Btw. this is not the first time Apple has helped workers at factories in foreign countries.

Tiv's picture
Joined: 08/12/2009
Posts: 3584

+1 Apple yes

I sleep fine at night knowing we are banning people who deserve it.  Tivon
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