Report: Apple Cuts 0.7 Percent of iPad Profit to Give Factory Workers Big Raise
May 31, 2010 9:15 PM
comment(s) - last by
Apple will lose 0.7 percent of its iPad profits to give the workers that assemble its device a 20 percent raise. Workers at Foxconn are currently struggling after a string of suicides and enduring reportedly poor working conditions.
(Source: Kin Cheung/AP)
A small cut to Apple's profit margin may make a big difference in workers' lives
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
at the Shenzhen facility.
by Chinese news organization
, 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.
This article is over a month old, voting and posting comments is disabled
RE: We're sorry...
6/1/2010 7:54:38 PM
Or they could NOT use a sweatshop.
I'm sure that if there were more economicaly viable methods, they would. A lot of companies use sweatshops, and it's not as if they'r actually worse to work in than any other job in that area. In fact, large businesses can benefit communities more than the government, and some house the workers, give them medical aid and fresh water. They even house their families and- oh, why am I trying to reason with unreasonable people. You win, Apple's evil, all other companies doing the same thing are good.
RE: We're sorry...
6/1/2010 10:52:23 PM
nobody said the other companies are good. they just point out that this is a publicity stunt for the mindless media believing drones of the world until the whole thing blows over. they know exactly what was going on before the media got hold of the topic and only now do they feel the need to save face. they have just released a pretty important product for them, what else are they going to do? fanboy much?
"People Don't Respect Confidentiality in This Industry" -- Sony Computer Entertainment of America President and CEO Jack Tretton
Foxconn Retracts Letter Asking Employees Not to Kill Themselves
May 28, 2010, 8:51 AM
Foxconn Makes Employees Promise Not to Kill Themselves
May 27, 2010, 4:07 PM
Apple Responds to Foxconn Suicides, Foxconn Website Hacked
May 26, 2010, 6:01 AM
Report: Only Escape From Hellish Apple iPhone Factory Was Suicide
May 19, 2010, 3:25 PM
Apple Reveals Child Labor was Used to Build iPods, iPhones, and Macs
March 3, 2010, 8:55 AM
Inspiron Laptops & 2-in-1 PCs
September 25, 2016, 9:00 AM
The Samsung Galaxy S7
September 14, 2016, 6:00 AM
Apple Watch 2 – Coming September 7th
September 3, 2016, 6:30 AM
Apple says “See you on the 7th.”
September 1, 2016, 6:30 AM
Apple sued because of iPhone 6 Touch Disease
August 31, 2016, 7:00 AM
Get Ready to wait in line – iPhone 7 due September.
August 18, 2016, 7:15 AM
Most Popular Articles
5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
Laptop or Tablet - Which Do You Prefer?
September 20, 2016, 6:32 AM
Update: Samsung Exchange Program Now in Progress
September 20, 2016, 5:30 AM
Smartphone Screen Protectors – What To Look For
September 21, 2016, 9:33 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
Latest Blog Posts
Who is in Risk of Getting Oral Cancer?
Sep 23, 2016, 6:02 AM
France Bans Plastic Eating Utensils in Restaurants
Sep 18, 2016, 10:49 AM
Progress Against Acute Myeloid Leukemia
Sep 17, 2016, 5:30 AM
Apple Watch Series 2 - Number 1 in the Customer Satisfaction.
Sep 7, 2016, 6:19 PM
First Self-Driving Car debut on the streets of Singapore
Aug 28, 2016, 4:10 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information