Friday, February 3, 2012

An apple a day

"Mastery of the economics of the supply chain is, however, only one of the reasons Jobs and Apple favored China. The central reason continued to be cheap labor that is disciplined by the state. What emerges in the Times account about Apple's practices is that, despite its protestations about being a socially responsible firm, Apple bargains hard, allowing its contractors "only the slimmest of profits". Thus, "suppliers often try to cut corners, replace expensive chemicals with less costly alternatives, or push their employees to work faster and longer".

"The only way you make money working for Apple is figuring out how to do things more efficiently or cheaper," said an executive at one company that helped bring the iPad to market. "And then they'll come back the next year, and force a 10% price cut."

Not surprisingly, a number of Apple suppliers have been plagued with accidents, including explosions, since, as one former Apple executive put it, "If you squeeze margins, you're forcing them to cut safety." (Thanks Karim)

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