Comment by xenophanes | Hacker News Reader

Comment by xenophanes | Hacker News Reader

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$575 profit per iPhone? I think you mixed up profit with something else, maybe average sale price.

In a free market, profit isn't determined by cost or your intuition about "fairness". Price is determined by supply and demand, and profit is price minus cost.

Foxxconn already pays well above average wages while providing a safer workplace than the average US manufacturer, and a lower suicide rate than the Chinese average. And this is still going up even as working hours decrease.

Whether all these criticisms are completely legitimate or not (for example I think workers should be allowed to work more overtime if they voluntarily choose to, to get more money, instead of being capped at 49hours/week), Apple is responding to them as well as anyone could ask for.

Apple's competitors are not getting the same scrutiny. Since Apple is handling the issue great, isn't there room for some of that attention to land on others with much worse practices?

Further, Apple has nowhere near 80% of the production or employees or anything like that. There are other big players as far as how many Chinese workers they are involved with, which I think is the relevant metric for how important reform is.

>> [Foxconn provides] a safer workplace than the average US manufacturer

Would really love to see some data that backs up that assertion.

I got it from

https://twitter.com/#!/nicepaul/status/163797296306331648/ph...

which gives a data source and is linked from

http://go.bloomberg.com/tech-blog/2012-03-20-now-can-we-star...

Careful with your data sources and assertions. Some of this "data" needs a serious dose of fact checking.

The data for: https://twitter.com/#!/nicepaul/status/163797296306331648/ph...

as indicated at the bottom, comes from: http://onforb.es/wj2Lt6

which maps to: http://www.forbes.com/sites/timworstall/2012/01/29/the-apple...

If you look at Tim Worstall's (kinda op-ed) article on the second page, you can see that the author says that if the fatalities rate in Foxconn was the same as that in the US, we would expect to have 35 fatalities / year. Then he says that we only heard about 3-4 workers hurt at Foxconn, hence the rate is lower. That argument is flawed because what we hear on the news cannot be construed to represent all fatalities at Foxconn. I suspect that the fatalities rate at Foxconn is not publicized (because it doesn't have to be).

Another issue is that to determine the relative safety of the workplaces, the author is only looking at workplace fatalities. What about looking at accidents that leave the workers unable to work or maimed?

Bottom line, I don't think the incomplete data that we have supports the assertion that Foxconn is a safer workplace.

OK, thanks.

The data does support the case. It may be incorrect, or incomplete. But why would they be hiding fatality stats? Why would they get away with that when they are subject to the crazy levels of scrutiny that we see today?

Safety management is based on identifying and reducing hazards, which reduces accidents, near misses, lost time injuries, serious injuries and ultimately fatalities. With a large enough number of workers, as we have in this case, fatality number is a very good proxy for the other stats.

>> The data does support the case.

Oh, it does? Let's look at the article together and see if we can find that data:

>> (The US rate is) 3.5 per 100,000: we would expect, if the Foxconn factories were no more dangerous than the average American workplace, 35 workplace deaths a year among those 1 million workers. Yes, each of those deaths, each of those injuries, in those aluminium dust explosions is a tragedy. But if we were being realistic rather than spouting nonsense over such matters we would not be using evidence of three or four deaths as evidence of how Apple, Foxconn or even China are ignoring worker safety in pursuit of filthy lucre. At a very minimum we would be looking at the total workplace death rate rather than cherry picking one specific incident.

The author's saying he's heard of 3-4 people killed... so how does that map to 7 in the infographic? Where exactly are the Foxconn stats coming from? Because the "data" offered in this article is "as-seen-on-TV". Is there even a system of reporting mandated by the national govt to collect data? In the absence of actual vetted data, how can you conclude that Foxconn manufacturing is 5-10 times safer than avg US manufacturing?

>> But why would they be hiding fatality stats?

If you are Foxconn, do you want people talking about Foxconn and fatalities in the same sentence? And if the govt doesn't require it, do you feel compelled to use your own internal resources to voluntarily compile and publish stats that make you look bad?

It's relatively easy to hide accident stats. It's very difficult to hide fatalities - especially over time.

I would be unsurprised at better safety stats than the US. With DuPont as one of several exceptions, the safety culture in the USA is still one of compliance. The mining record is awful versus global large companies. Apple and other customers are able to demand and get certain requirements met. A key part of that would be safety, and the first rule is integrity in measurement.

I've seen plants in Colombia and Mozambique operate at industry leading levels of safety. China can do it too - it really helps when you have a workforce that is motivated and eager for the relatively high paid work.

Lots of jobs are way more dangerous than assembly iPads. How would you die while assembling an iPad?

So a variety of US jobs against Foxconn isn't exactly comparing like with like.

I think this stat can exonerate Foxconn work as pretty safe even by US standards without condemning the US.

Fair point about comparison with other USA industries. The overriding tone of the overall conversation (not just on HN) is whether Apple et al. are outsourcing to a place with lower standards, including safety. Comparing Foxconn stats to US norms is then a valid approach.

> How would you die while assembling an iPad?

Since you asked - here are some typical risks. Happily these are all mitigable.

Falling from heights while in the store - for parts or for shipping. Hit by a moving light vehicle inside the factory - forklift etc Hit by a light or heavy vehicle outside the factory - e.g. when in loading operations Incorrect handling of hazardous materials resulting in explosion Incorrect handing of molten materials (plastics, metals) Poor guarding on major equipment catching clothes and dragging worker into equipment. Ditto with poor isolation equipment prior to maintenance (machine switched on while someone is inside it) Electrocution due to lack of isolation of electrified equipment before commencing maintenance work Inhalation of fumes and other toxic emissions Crushing by a press or other heavy industrial machine during operation, maintenance or installation Crushed by stacks of inventory (parts, finished product) falling Electrical fire or other sort of fire Food poisoning, collapse of building, any incidents in staff accommodation and so on.

>> [Foxconn provides] a safer workplace than the average US manufacturer

The data doesn't show that at all. It is at best safer than the average US workplace. The average is skewed by these dangerous jobs: http://www.forbes.com/2008/08/25/dangerous-jobs-fishing-lead...

Also I really hope any company has a lower suicide rate than the national average people employed after all tend to be happier than those who aren't

>$575 profit per iPhone? I think you mixed up profit with something else, maybe average sale price.

The number is from the usual suspect Asymco.

http://www.asymco.com/2012/04/02/android-economics/

>Whereas Android generates $1.70/device/year and thus an Android device with a two year life generates about $3.5 to Google over its life, Apple obtained $576.3 for each iOS device it sold in 2011[4]. The economics of Android are nothing like the economics of iOS.

That's revenue (gross income) not profit (net income). Look at the charts on that article, they say all "revenue", the article is about revenue.

Apple has an ASP on iphones on the order of 650 and a profit margin on the order of 40%. They can't be making 575 profit per phone.

If that is correct, I stand corrected. I was taken in by the summary on Slashdot which stated that the profit was $575 and quoted Asymco.

http://mobile.slashdot.org/story/12/04/08/0546247/google-ear...

Slashdot has always reminded me of that clueless friend that always remembers the numbers from a news story but doesn't remember the units or have any sense of them in a meaningful context.

I don't know why people even read Asymco. His data why seemingly true, because he shows you charts and whatnot, it's usually very misleading.

Apple doesn't make $575 in profit per iPhone. The components alone cost around $300, and they only get like $650 from the carrier, but you also have to take into account all the extra costs, marketing, shipping, salaries, R&D, and so on. At most they probably make around $200-$300 in profit for iPhone, depending on the version.

The Android data is also misleading. He's taking it from what Google said in the trial. You don't think Google would try to downplay the revenues they get from Android in the trial through some smart accounting?

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