Even with a failure to meet latest targets – presumably to iPhone 5 hype and 4S meh meaning phone sales were down 3 million from projections – Apple Computer still turned a ludicrous $28bn last quarter. That’s two thirds up on previous turnover, and a whopping 85% up on profit – thanks to very healthy margins on their premium i-Gewgaws.
Tim Cook’s biggest problem now is what to do with an $81bn and growing surplus that Apple are just sitting on. Frankly, they’re raking it in far faster than they can do anything with it. They were never big on dividends to shareholders, and even their much vaunted R&D operation is only $450m a year – hardly a pinprick on their cash mountain. And the problem shows no sign of going away – as they charge into the Chinese gadget market, they’re predicting a bailout-tastic £37bn for the next quarter.
So given they have more money than they know what to do with, why are they still so keen on screwing every penny out of their suppliers, and by extension their outsourced workforce? Looking at the iPhone, Apple have by far the largest margin on their handsets in the industry – up to 65%. And earlier this year, they started to demand their many downstream suppliers shave a further 10% off their costs, to compensate for the huge increases in iPad business Apple were putting their way.
Prominent amongst these suppliers is Foxconn, the Chinese electronics behemoth that assembles the iPhones and iPads from parts provided by dozens of separate suppliers. They do this sort of work for many companies, including Nokia. They do it cheap, and they do it on a huge scale.
Chances are though that if you’ve heard of them, it’s because of the shocking allegations flying around about their abuses of the hundreds of thousands of people working for them. Last year, after a string of worker suicides in their gigantic factory dormitories, Apple were shamed into acting, and Foxconn promised increased wages to compensate (which of course strangely seemed not to actually appear as promised, and where they did were accompanied by greater performance stress).
A very hefty chunk of Apple’s spare $81billion has been extracted from the sweat of Foxconn workers (and that’s just taking the first – if most infamous – name of their many suppliers).
Is it too much to ask for Tim Cook and Apple to ease up on the cash grab from now on? Use the strong-armed 10% savings, and more besides to make real change ongoing for the people without whom, Apple products couldn’t exist in such abundance.
It’s not just pay. Get Foxconn and others to reduce the punishing workloads, high stress levels and even workplace violence, to allow people some respite and dignity away from the company, and to improve basic safety provisions, so that workers don’t need to grind iPad cases without protective equipment against breathing in aluminium dust, or clean iPhone screens with dangerous solvents because non-toxic ones cost a fraction more.
Even a tiny fraction of $81bn would go an awful long way to repairing some of the damage Apple are doing to the workers it likes to pretend it doesn’t have.