Foxconn warns phones prices will rise
Decent working conditions cost more. Sorry
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Mobile phone prices are set to rise, warns the owner of the Foxconn factories.
The Hon Hai Precision Industry Co has suggested customers of Apple, Nokia and others should expect a hike given the amount Foxconn has been spending on improving conditions for workers, and the fact that it has employed a PR agency for the first time.
Local Citibank analyst Chang Kaiwei has been telling the Commercial Times newspaper that price rises are imminent, as Reuters reports.
Foxconn's new PR efforts are evident, with the company recently getting in touch to tell us about how much it doesn't abuse its employees or visiting students. But all that touchy-feely stuff costs money, which is going to have to come from the pockets of customers.
It's easy to say that one would be happy to pay an extra tenner for something made by workers who aren't paid in rice; but the electronics business is very price-sensitive, and Hon Hai will have to take care not to improve workers' conditions to the point where the brands take their business elsewhere. ®
COMMENTS
It's not how much...
...El Reg do or do not care, it's how much we as consumers care. We want low prices, and someone has to pay for that. Why do you think our t-shirts, trainers etc are so cheap? We're not paying the true price, some of the cost is absorbed by human misery.
If the price of a phone from company X rises dues to this and the equivalent from company Y stays the same because they go to a different manufacturer, then consumers will switch to Y and company X goes down the toilet. Consumer demand will force companies to move to the cheapest manufacturer, regardless of working conditions.
Even for consumers who do care, there is no way for them to be sure if it's company X or Y actually who have decent working conditions. For all they know, company X could be taking the piss or company Y may simply Actiobe more efficient. One can't exactly buy "FairTrade" mobile phones.
One could say that company X should take a small hit on profits to ensure decent conditions, but then dividends and share price drop, investors leave and one bitches about one's pension.
The only thing that can really be done is to keep exposing the exploitation until it becomes too risky for companies to even consider dealing with such manufacturers.
Did you, or anyone else reading this, avoid purchasing anything made by Foxconn because of worker conditions (e.g. Apple products, Nokia phones)? Did anyone write to the relevant CEOs and say why they were boycotting their products? Nope, me neither.
It's a sick, sad world; but it is so easy to ignore what goes on when it is "over there".
Meh....
You think price increases will slow iPhone sales? The initial $499 and $599 prices of the first iPhone with no app store or apps, didn't stop idiots from standing in line to buy a POS smartphone that was hobbled, lacking features regular cell phones had, and ridiculously overpriced for what you got. It doesn't really matter what Apple charges for their gear. There will always be rich people with more money than sense who will buy anything with an Apple logo on it. Foxconn isn't going to lose any business over this. You sheep will pay whatever you're asked to pay. Koolaid is good. LOL!!!
Elsewhere?
"Hon Hai will have to take care not to improve workers' conditions to the point where the brands take their business elsewhere"
What elsewhere?
There may be a plethora of 3rd world countries that would love to pimp their citizens as an alternative labour force to Foxconn, but how many of them have the production facilities of a scale and standard to present themselves as a real alternative?
@Ralph 4 (post 3)
I agree, but capital is more global than social legislation - and European integration is proving tricky enough at the moment, so global political integration, though necessary and hopefully inevitable, will take quite some time.
However, the credit crunch / recession does seem like it will stem the West's bogus wealth and encourage China to develop internal markets. And while other nations may get to be the bottom-of-the-barrel labour pool for other sectors at least, China's raising living standards (400m out of poverty in a decade) does mean there'll be more 'sludge' to service on a smaller barrel bottom - that is, they'll be in China's abdicated position and so should be able to pull the same growth and raising of standards in their turn.
In the end, all this free-trade, globalisation, movement of capital, inflation, devaluation, etc is moving us towards a less imbalanced world. They'll be richer, we'll be poorer - but we'll also be richer in the sense that our government's hope to be a 'knowledge based economy', whilst keeping an edge that notionally helps maintain our privileged status in the world pecking order, necessarily discriminates against those more genetically suited to less intellectual work.
When our less academic children can again work in factories/etc, instead of flunking by the metrics of the 'knowledge based economy' to be abandoned on the dole queue and excluded from first world privilege, we will know the imbalances of the world economy are largely resolved and that we can all enjoy having available a full range of the types of experiences that our diverse human natures may require for happy symbiosis within our communities.
That is, each nation would have a diverse economy with opportunities for all types of people.
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