Monday, March 08, 2010:
There's trouble brewing at Apple's factories in China. After reports of child labour and the suicide of a young employee at one of Apple's plants, there have been calls for some radical changes in the way these plants function, but here's the truth: there's little that Apple can do about it.
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Though Apple deserves a pat on its back for auditing its suppliers to identify poor working conditions, its suppliers are so powerful that Apple can't bring in any real change-nor for that matter can any other tech company. Analysts claim that Foxconn and its two rivals, Quanta and Pegatron, are the only three companies in the world that can quickly mass-produce Apple products of the right quality, says the Telegraph.
Industry pundits believe it is this troika, and not Apple, that hold the real power in the relationship. "In the near term, there is absolutely nothing that Apple can do to shift away from these companies," said Edward Yen, technology analyst, UBS. "Apple's biggest concern is whether the factories can deliver on time, and get the quality right. There really aren't that many players who can do that, major players who have the skillset and flexibility," he added.
Apple has been accused of using child labour and making employees work long hours for low wages at many of its suppliers. Many issues had deteriorated in 2009, but Apple only cancelled the contract of one supplier. Foxconn, Quanta and Pegatron are all giants in their own rights, producing goods for a host of top-class brands, such as Sony, HP, Dell, Acer and Nokia. Quanta is the world's biggest laptop maker, and manufactures 90 per cent of Apple's Macbooks, reveals Mr Yen.
Foxconn manufactures the iPhones and the two firms split the production of Apple's iMac desktop computers fifty-fifty. Pegatron produces a few of Apple's iPods. Apple takes care of the research and development, and then passes the blueprints to its suppliers.
Ashish Joshi, EFYTIMES News Network
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