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An army of Indian workers earning $4 a day are putting together your next iPhone

By nanoguy · 58 replies
Sep 2, 2019
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  1. Apple faces 10-15 percent tariffs that will be levied on everything that comes from China, from smartwatches and headphones to phones, tablets, and Macs. Reuters recently took a look at the company's supply chain and found a dangerous dependence on China that is going to be very difficult to overcome. In the case of the iPhone, it has until mid-December to figure out a way to avoid the implications of the tariffs imposed by the Trump administration.

    So far, Apple has looked into Brazil and Vietnam as possible places to shift production for its top-selling product, but it turns out that India would be a more lucrative investment. The other two countries don't meet all the standards and can't supply some of the essentials in the bill of materials, such as plastics and screws. Last week, Foxconn explained its ambitions to gradually make more iPhones in India, where it has already built two factories and is seeking approvals to build another two in the next few years.

    Bloomberg says that India's appeal is easily explained through the large and low-cost workforce that is almost comparable to that of China. The Indian government has previously been reluctant to let manufacturers capitalize on its country but has come around to the idea of taking advantage of China's trade war with the US. Josh Foulger, head of Foxconn's India operations says "it’s a good business principle not to put all your eggs in a single basket," and explains that the company can't "put a factory in Mexico for manufacturing mobiles. It might have worked 10 years ago, it just won’t work today."

    To its credit, India is taking all the right steps in emulating China's appeal by making it easier to set up shop and at the same time reducing the unemployment rate in the country, which is over 6 percent. Prime Minister Narendra Modi has made it his mission to adapt the government policies and to offer manufacturers incentives to open factories. Foxconn chose to open its first Indian facility in Sri City, where "goods can be imported and exported with limited red tape and foreign companies make everything from diapers to train carriages."

    To put things in perspective, the plan is to take India from being a $25 billion manufacturing center to a $400 billion hotspot by 2024, most of it geared towards export. That said, there are several things that need to happen before reaching those ambitions. First, there's the need to replicate China's extensive network of component suppliers for things like batteries and semiconductors. Second, India's infrastructure has to transform to accommodate large-scale supply chains for major major firms - everything from roads to rail systems and ports.

    Anshul Gupta, senior research director at Gartner India, believes "things are beginning to fall in place. India can bolster its manufacturing capacity and help the world cut its reliance on China." It took 30 years for China to get where it is today in terms of efficiency, but several big companies like Amazon, Apple, Google, Dell, and others have a renewed interest to spearhead India's development

    Perhaps more worrying is that Foxconn's current plants employ mostly women who are paid $4 per day to assemble things like the iPhone X and XS as well as Xiaomi's alternatives. That said, women typically do household and farm work, so this would be a small step-up from that. Foulger, a "two-decade veteran of supply chains in India," says the working conditions have also been adapted to keep them comfortable at work.

    Foxconn has been subject to a lot of criticism as of late for questionable practices involving children at its China factories as well as difficult working conditions. Bloomberg says a visit to Foxconn's India factories has revealed "no visible sign of sweat-shop conditions" and that workers are mostly complaining about the repetitive nature of their job. Still, the pay is a paltry $130 per month which keeps these workers just above the extreme poverty line. Chances are the next iPhone you buy will be made by Indian women that have few other opportunities to choose from.

    Permalink to story.

  2. EEatGDL

    EEatGDL TS Evangelist Posts: 704   +405

    Well... Trump will need to start a trade war with India.

    If he wants to effectively bring back production to the US, he needs to create a trade war with the other 194 countries in the world, else I don't see it happening any time soon.
  3. Capaill

    Capaill TS Evangelist Posts: 949   +524

    iPhones are too expensive. Reduce their pay to $2 per day and my life will be much better!!!!
  4. Squid Surprise

    Squid Surprise TS Evangelist Posts: 2,606   +1,593

    Loving the clickbait title... would it kill you to have the title simply say “companies switching from China to India”?
  5. yeeeeman

    yeeeeman TS Maniac Posts: 188   +162

    Great! With China, Trump could say that the "stupid" Chinese people are stealing US stuff. Now, with India, the situation is a bit different. Given that a lot of us companies are run or have top people from India, finally us people might understand that their success in tech is because of smart people all over the world.
  6. Skjorn

    Skjorn TS Maniac Posts: 405   +226

    I never buy apple products so the title should be changed to "the" instead of "your". Clickbaity sensationalism.

  7. seeprime

    seeprime TS Guru Posts: 405   +432

    Incentives to build automated US megafactories, along with balanced tariffs on all imports would have been a much better long term solution. Now,. production will jump to other non-US countries. That's not "winning".
    Charles Olson and Bulllee like this.
  8. wiyosaya

    wiyosaya TS Evangelist Posts: 4,218   +2,484

    Confirmation that feckless leader has no clue.
    Charles Olson and TempleOrion like this.
  9. EClyde

    EClyde TS Evangelist Posts: 1,893   +712

    If they don't like $4 a day let them go down to the toilets and dive for dollars
  10. EClyde

    EClyde TS Evangelist Posts: 1,893   +712

    Feckless....ha ha ha. Your word of the day?
  11. Adi6293

    Adi6293 TS Maniac Posts: 261   +239

    That is disgusting, paying someone $4 a day, capitalism is very broken......
  12. wiyosaya

    wiyosaya TS Evangelist Posts: 4,218   +2,484

    Honestly? I would not expect that you would get it. There are a myriad of ways around feckless leader's "tariffs." However, it does not surprise me that even an educated individual, such as yourself, would think that feckless leader knows even half of what he is doing.

    Don't you have a client to addict?
    Charles Olson and TempleOrion like this.
  13. loki1944

    loki1944 TS Maniac Posts: 224   +146

    This article is disingenuous; 4 American dollars can be worth a lot more in certain countries than it is here. What this article should have discussed was what the buying power of that $4 in India translates to. I've lived places where 4 American dollars could get you a shitton of food. 1 American dollar is worth about 71 Indian Rupees. How does that translate in terms of cost of living?

    "Cost of living in India is 66.11% lower than in United States (aggregate data for all cities, rent is not taken into account). Rent in India is 86.05% lower than in United States"
    Last edited: Sep 2, 2019
  14. QuantumPhysics

    QuantumPhysics TS Evangelist Posts: 1,630   +1,229

    You need to learn what the Consumer Price Index is.

    Their local economy would explode if we paid them more than they were worth to asemble these things.

    The reason we go to Asia for manual labor is because it's cheap. Almost 5 Billion of them (Asia/SE Asia) vs. 350 Million of us (Americans) <40 Million Canadians.
    TempleOrion likes this.
  15. QuantumPhysics

    QuantumPhysics TS Evangelist Posts: 1,630   +1,229

    Most American slacktivists hear these numbers and don't understand what the CONSUMER PRICE INDEX is, nor have they ever traveled and lived in these countries.

    I regularly vacation in Asia.

    The flight (business class) eats up 80% of my budget.

    My apartment in China was significantly less than an apartment in America.
    Average Chinese citizen earns a 10th what the average American earns.
    My condo in Manila was only $15 a day.
    Average Filipino earns less than $6000 a year.

    In Thailand and Philippines they live less expensive and eat healthier for less money.

    India is also filled with poverty so the local economy would go haywire if they tried to give low-skill work with high pay there.
    TempleOrion and Capaill like this.
  16. QuantumPhysics

    QuantumPhysics TS Evangelist Posts: 1,630   +1,229

    At the end of the day, Apple is not going to raise prices higher than it feels its market will take. They'll find the poorest country on Earth, build up the local infrastructure and build iPhones there. They'll possibly increase productivity and build their profit.

    The local economy will suddenly grow overnight now that people will rush in for jobs.

    All I want is a 1TB upgrade in my next iPhone. I'm not paying $2000 for it so work your magic Tim Apple!!!
  17. loki1944

    loki1944 TS Maniac Posts: 224   +146

    Guess what I'm saying is the $4 an hour could meet or exceed the average income, so it's more of a win-win for Apple/Indians in that case.
    Charles Olson likes this.
  18. QuantumPhysics

    QuantumPhysics TS Evangelist Posts: 1,630   +1,229

    When China was poor(er) it was a win-win for China too.

    Apple gets to produce its product as cheaply as possible even while maintaining quality control - and still sees profit.

    China gets jobs and economic zone growth.

    What Trump's doing is trying to turn back the clock on China and take away the economic growth that 350,000,000 wasteful, spendthrift Americans are giving them year over year. If China loses Apple, they'll lose many multiples of Billions of dollars year over year. Thing it: Chinese manufacturers like Hua Wei and Oppo have reached the point (by copying apple) that they can create reasonable products that are affordable for the impoverished citizens of Asia and South East Asia.
  19. Shake

    Shake TS Rookie

    "Your"? I'll never buy apple, for the birds
  20. QuantumPhysics

    QuantumPhysics TS Evangelist Posts: 1,630   +1,229

    OK - so I won't need to worry about you buying a unit I will. Wonderful!
    No more long lines!
  21. treetops

    treetops TS Evangelist Posts: 2,646   +615

    I wonder if they get 36 hour shifts, beatings and suicide nets to catch jumpers like the Chinese Foxcon factories?
  22. QuantumPhysics

    QuantumPhysics TS Evangelist Posts: 1,630   +1,229

    Darwin would call those limiting factors.
  23. wiyosaya

    wiyosaya TS Evangelist Posts: 4,218   +2,484

    So this is how you treat your employees?
    Charles Olson likes this.
  24. Adi6293

    Adi6293 TS Maniac Posts: 261   +239

    I understand why it happens and I'm not expecting them to get paid $100 a day but like the article said it only puts them just above extreme poverty line, I'm sure Foxconn can afford to pay them $10 a day, those iPhones get sold for a $1000 man
    TempleOrion and emmzo like this.
  25. captaincranky

    captaincranky TechSpot Addict Posts: 15,179   +4,127

    Why, is the truth more than you can handle?
    Charles Olson and wiyosaya like this.

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