How much of iPhone’s increased price will go to Chinese workers?

October 23, 2011

Yesterday, Apple Online Store in 22 countries, including Singapore started to take reservation of iPhone 4s, which is supposed to be in stock from 28 October onward in these countries. While checking on Apple Online Store, I found the price is S$ 948, while the iPhone 4 was S$ 888 when it came out last year.

I was a bit surprised, since I was expecting the price be lower. That is because the USD depreciates a lot in the past year, so if the price in US stays the same as last year, it should decrease in term of SGD. That happened to the new MacBook Pro, MacBook Air and iPad 2. The price of iPhone 4s, with 2-year plan, stays 199USD, so I made an assumption that the price of contact-free should keep the same.

As the title indicates, I am not writing to complaint the increase of price. Actually, the price does not matter to me, since I am not buying iPhone 4s. What I am wondering is how much of the increased price will go to Foxconn, and finally to the Chinese assembling workers.

Last year, there were 14 suicides in Foxconn, Apple’s main manufacture, factory in China, and a new one happened on 15 October 2011. It is believed those workers decided to end their life because of the long-hour working time but very small wage. This website lists out some of the salary receipts, which shows the basic wage is 980 CNY (195.65 SGD), working 10 hours everyday per month with 2 days off. With more than 100 hours overtime, their wage can reach to 1800CNY(360 SGD). While the property price outside the main city of Shenzhen, where locates one of Foxconn’s largest factories, is more than 10,000CNY per meter square. The exact compensation to the victim’s family is known, but some says Foxconn’s policy is 100,000 CNY; and some workers would like to suicide to “make money” than to work.

We may blame Foxconn abusing workers, however, we should not ignore Apple. A report shows, “Apple only pays £3.99 to manufacture a £600 iPhone”.

That does not only happen in Foxconn, but its 14-jumps drew the attention. In fact, not only Apple, but also many other companies such as Dell, HP, Motorola are doing the same way: paying very little to factories in China to assemble their products.

There is none caring about the workers. The officials want to attract more foreign companies to increase GDP which will contribute to their political “score”, so they will not set the salary baseline as low as possible; the companies will only pay workers the minimum wage, stated by laws, to maximize their revenue. This is what globalization does, making the rich richer, the poor poorer!

Many people in other countries are complaining that Chinese have taken their jobs. But they never think about that the Chinese will never ask for such low price if they can have a better life. If you have shoes to ware, you will not chose to bare foot.

I remember in the last meeting with Steve Jobs, Obama praised Apple for its great products, and asked Jobs to create more jobs in US or even produce the products inside US. If Apple does so, what will the price of iPhone be? 2000USD?

The low-price Chinese products have been contributed to good live standard for the people over the world for a long time. This is surely going to change. Be prepared for the increasing price. And I do hope more of the increased price go to the workers, who is at my age and many are even younger than me.