Apple (AAPL) is one of the most popular companies in the world and produces some of the most sought after products in the world, including their ubiquitous smartphones. By the end of 2023, Apple was first in 澳洲幸运5官方开奖结果体彩网:market share foꦬr smartphones, often trading places for the number one spot with Samsung.

Apple controls 23% of the global smartphone market share, while Samsung controls 16% and Xiaomi controls 13% as of the last quarter of 2023. In terms of profits from smartphones, Apple is also the leader. The company took 75% of the industry's profits and 40% of revenue in 2021.

Apple makes such 🐼large profits through a sizable markꦗup on its phones.

iPhone Cost

The iPhone 15 is Apple's latest phone and comes in various iterations as previous models have. The iPhone 15 Pro, depending on storage size, costs between $999 and $1499. It's quite a hefty price tag, especially when it's estimated that the actual cost of all the components to make the phone amounts to approximately $558.

Labor Costs

The iPhone is primarily assembled in China by Taiwanese companies, such as Foxconn. The average salary for an iPhone worker is $10 an hour. The top earners make approximately $27 an hour while the 25th percentile makes $12 an hour. Still, some have accused Apple and Foxconn of using temporary workers that make up as much as half of the work force in an attempt to keep labor costs down, more than the 10% limit mandated by Chinese labor law.

According to Tim Cook, the CEO of Apple, the reason to build in China is not because of the lower labor costs. If this were the case, Apple could make its phones in even cheaper locations. The main reason, according to Cook, is the skill required in tooling engineering. He claims that the specific skill set is no longer available in the U.S., but in China, the expertise is prevalent.

In addition, logistically, China makes the most sense to ship a product around the world as the country has seven of the world's largest 10 ports. If Apple were to build the iPhone in the U.S., it would onl🐼ꦡy be able to build a small amount a year at a significantly higher cost.

Labor Conditions

In the early days of iPhone production, there were reports that labor conditions for workers at Foxconn were awful and grim.

Reports have indicated that Apple's manufacturing partners in China, including Foxconn, have required workers to work long hours, including overtime, in order to meet production demands. There have also been allegations of inadequate safety measures and poor working conditions at some of Apple's manufacturing facilities in China, including workers being exposed to hazardous chemicals and other dangerous conditions. In addition, Apple's manufacturing practices in China have been criticized for their environmental impact, including the use of hazardous chemicals and the generation of waste.

Some critics have argued that Apple's manufacturing partners in China pay workers low wages, particularly compared to the cost of living in the urban parts of the country. There have also been allegations that Apple's manufacturing partners in China have violated workers' rights, including the right to form unions and engage in collective bargaining.

Apple has implemented various programs and initiatives to improve working conditions and labor practices at its manufacturing facilities in China, but some critics have argued that these efforts have not gone far enough. Also note that the issue of labor conditions in Chinese factories is not limited to Apple's production, but extends to many American and international corporations who employ Chinese labor.

The Bottom Line

Apple is a very successful company, and as consumers, we pay a premium price for the products the company makes. Some people purchase Apple products to become part of the 'trendy' Ap𒈔ple brand, and for Apple to maintain its high profits and low manufacturing costs, the company will continue to manufacture its phones in China and other low-cost locations. Because of this, however, concerns about worker rights and related issues will likely remain relevant.