The price of cruelty-free Apple products

Did the tech giant figure the ends justified the means?

By Jonathan Berr Feb 14, 2012 12:42PM
Image: Money and computer (© Angel Muniz/Jupiterimages)Would consumers be willing to pay higher prices for iPads, Macs and iPhones to make sure Apple's (AAPL) suppliers treated their workers more humanely?

Foxconn, one of Apple's main suppliers, seems to have consulted the works of Charles Dickens for management tips.

Employees at Foxconn's factories in China are reportedly treated like machines. In 2010, there were 13 suicides at the company's sprawling complex, known as Foxconn City. In response to mounting public pressure, Apple has asked an independent group called the Fair Labor Association to probe conditions at its suppliers.

While the move is a welcome step in the right direction, it raises some disturbing questions as to whether the company turned a blind eye to worker abuses as long as suppliers met its exacting demands for high quality at low prices. Apple spells out its philosophy on its website.

"Our goal, in a nutshell, is to obtain stellar products and services within tight timeframes, at a cost that represents the best possible value to our customers and shareholders," it says. "If that sounds like a daunting task, it's the same one we assign ourselves. . . . We take our social and environmental responsibilities seriously."

What Apple does not say is that there is no way American companies -- with their minimum wage and worker safety rules -- could meet its standards. Consider what happened when Apple needed to redesign the iPhone's screen at the last minute. New screens began arriving at a Chinese plant near midnight, and a foreman immediately woke up 8,000 workers who were sleeping in their rooms at the plant's dormitories.

"Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames, " the New York Times said. "Within 96 hours, the plant was producing over 10,000 iPhones a day."

Did Apple chose to ignore evidence that workers were being mistreated by its suppliers? The computer maker was such a huge customer that companies that manufacture its products were probably too frightened to say "no" when there would be plenty of competitors eager to say "yes."

While the flexibility of China's manufacturing machine is impressive, the toll of almost nonstop labor on workers is huge. Some are asking for and getting higher wages from their employers. In fact, it's gotten to the point that some manufacturers are leaving China for even lower-wage countries.

The push for workers' rights in China will result in higher costs for American consumers.  It's only a matter of time before the prices of Apple products reflect this new reality.

--Jonathan Berr is an Apple consumer but not a shareholder.

Tags: AAPL
Feb 17, 2012 5:42PM
How come the oil companies are portrayed as evil when their employees make a good living but apple is a great company and they employ kids and extremely low wage employees while making billions,
Feb 20, 2012 10:29AM
Maybe the CEO and top dogs need to take a "cut".  I have a whole different perspective of Jobs now as this is one more company who has produced product out of the country and at slave labor.  It is disgusting.  When will we as Americans wake up to companies doing this and NOT buy their products.  Let it be made in America at a fair wage and let's not be so greedy at the top that we walk right over the public with our riches.  Jobs you had the brains but no real soul!
Feb 20, 2012 11:41AM
The push for workers' rights in China will result in higher costs for American consumers.  It's only a matter of time before the prices of Apple products reflect this new reality. 

Are you serious?  

1.) Apple products cost over twice as much as other manufacturers offerings.
2.) Apple has more cash on hand than the US government.

Do you work for Apple or Foxxconn?  Is this a threat?  Mistreat humans and pay them nothing or your precious Apple products will go up in price?  Sounds like an ultimatum to me.
Feb 14, 2012 3:01PM

Apple is in business to bring the highest possible return for their shareholders.  Apple is the one company that can make changes to the current system.  I don't understand why there is not an occupy apple campaign going on.    They have the second best quarter profit ever by a company and people want to still talk about the banks.  Apple made a billion dollars of profit a week.  A week.  Not in the quarter, not in the month, but a week. 


If you want change, then start with Apple.  You know what, I bet they won't change much because they don't have too.  They have almost $100 billion in the bank, a bunch of rabid fans, businesses are now using their products more and more.  No need for them to do much more than make cosmetic changes.  Not saying I agree with that, just sayin...

Feb 14, 2012 1:29PM

Apple's Foxconn iToy workers get paid 70 cents an hour to spend 10 hours, $180-240 month at 12-16 hours a day, building devices that end up costing $200 parts and $7 labor to build and sell for $600-800 retail. Apple could invest the billions required to automate the assembly process using the $80 billion they've raped from the workers.  Apple could pay US workers $20-30 hour raising the device costs to $400-500 and cutting their profits in half. Apple's doesn't deserve all the blame. Apple's consumers share the blame and maybe if we start glaring at iPhone and iPad users for the responsibility of the business model they are worshiping, Apple will change. Apple may have to change if Microsoft and Nokia are successful at bringing a more responsible ecosystem to the mobile consumer market. Maybe Steve visualized the opportunity that existed as he did all those Eastern drugs in India and other countries.

Feb 17, 2012 5:54PM

Apple products cost more then any other tech company, yet their labor is extremely cheap, deathly cheap one could say, so all this BS about doing it so us customers can have cheaper prices is a lie.  It's so their stock soars and their CEO and officers make huge bonuses....  Has nothing to do with their customers...


Apple has so much cash they don't know what to do with it all....  given that cash is stained with blood from workers at Foxcom... but hey there only chinese right?  So who cares... 



Feb 20, 2012 4:06PM
Pay more for Apple products? They already charge so much there isn't a valid excuse for their products not to be made in the US!!! We need to be responsible consumers and demand those products be built in the USA. We've lost so many jobs because corporations want to eek out an additional ten cents profit per unit sold, so they move their factories over seas. Worse consumers just keep buying. Please pay attention where the products come from when you shop. Consumers are directly responsible for the unemployment rate. If we demand products be made here the companies will follow suite. When companies open factories here that creates more jobs, unemployment drops, and so does crime.
Feb 14, 2012 2:26PM
Smile Keep buying it's only money. And it's not mine.
Feb 14, 2012 1:55PM
No they would not be willing to pay higher prices for cruelty free Apple products, just like they would not be willing to pay more for cars, and 90% of the other products that are manufactured off US shores. People are sheep and this sounds like a good thing to be on the band wagon for, but the very same people would lose their collective lunches if everything they had to buy was made in the US and they had to pay more. For the globally concerned, please consider that in doing this the folks in the good old US expect a higher wage for the time they spend making you stuff, because they want to live the American dream just like you. They need good healthcare, because they deserve it right? They should have the right to shut their employer down because they deserve to be treated as they see fit right? Now all of this comes at a small price. The jobs created in doing this put folks back to work and ensures that they can now afford the higher costs of things that are made here right. The problem with that is the companies must raise prices considerably given that materials are no cheaper and neither is the cost to transport them to the non exsistent US factories. Now working folks can't afford the cost of the stuff they make themselves here at home, businesses can't lower the prices because they have to make a profit to pay the workers that make the stuff right? See how the circle works? See how the argument gets to be unreasonable? I am an absolute fan of watching the passionate walk themselves off a cliff in the name of an idea that is not well thought out. If you are going to be a good idea fairy then you should suffer some pain for crying wolf and expecting someone else to fix the problem. Good job with Bank of America's $5 debit charge. Having Apple or any other large Tech company bring manufacturing to the US is not a well thought out argument. Tell you what, when Apple makes this problem dissappear and the stock goes to $1000 a share I'll walk buy an Apple store and buy some of the protesters a coffee because they'll deserve it for having given it the old college try.  
Feb 22, 2012 8:07AM
There's no cruelty involved with the iPhone, or any other Apple product.  The media is trying to find a problem that does not exist.
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

125 rated 1
264 rated 2
485 rated 3
679 rated 4
640 rated 5
617 rated 6
632 rated 7
493 rated 8
276 rated 9
153 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.