A report from Bloomberg today confirmed Foxconn is interested in hiring new safety and security experts to help improve working conditions in facilities responsible for supplying Apple products. Foxconn’s retail division chairman Louis Woo confirmed the job listings, which include a “lifestyle manager” responsible for maintaining worker dorms and healthcare, a safety and security expert, and two fire chiefs: Expand Expanding Close
As the Fair Labor Association inspectors interview Foxconn employees about working conditions at iPad plants, early reports coming our way are a bit ambiguous and a tad confusing. First FLA president toldReuters that plant floors are spotless, then Bloombergpublished an article claiming the organization found “tons of issues,” and finally those two video teasers (here and here) from ABC Nightline’s ‘iFactory’ documentary added ambiguity as the producers apparently “didn’t find any egregious violations.”
Knowing ABC’s parent company Disney has the Steve Jobs Trust as its largest shareholder, and considering that FLA is funded by the biggest players in the industry, including Apple who commissioned the Foxconn inspection that began last week, some watchers are speculating there must be more to this than meets the eye. Read on… Expand Expanding Close
[vodpod id=Video.16115602&w=650&h=420&fv=allowFullScreen%3Dtrue%26bgcolor%3D%23000000%26autoPlay%3Dfalse%26screensLayer.startScreenOverId%3DstartScreen%26screensLayer.startScreenId%3DstartScreen%26] Note: A YouTube version should be up soon
As promised, ABC aired its documentary about Foxconn factories producing Apple products. In an unprecedented move, Apple decided to grant the network’s “Nightline” program full access to its Chinese supply chain, so correspondent Bill Weir traveled to Shenzhen, China to look at “iFactories,” as ABC dubbed them.
Full disclosure: Disney Corporation owns the ABC News network. The fact that the Steve Jobs Trust is Disney’s largest individual shareholder, coupled with Disney CEO Bob Iger now having a seat on Apple’s board of directors, certainly helped win the official approval from Apple. It also raises questions on a possible conflict of interest with this report.
The full “iFactory: Inside Apple” report is scheduled to air on a special edition of “Nightline” due tomorrow, Feb. 21, at 11:35pm ET/PT. A preview will air on “Good Morning America” and “World News with Diane Sawyer.” A long article that accompanies a video teaser, included above for your convenience, offers a grim description of working conditions inside Foxconn plants:
With the Fair Labor Association audit of Apple suppliers at Foxconn City underway for several days now, the first details are starting to trickle in. The non-profit agency’s head Auret van Heerden toldReuters that working conditions at Foxconn’s iPad plant are “far better” than those at their factories elsewhere in the country. It is a personal impression and not the official stance, because 30 FLA staff members have three weeks to interview about 35,000 workers at two Foxconn plants in China.
Workers will answer questions anonymously by entering their responses with iPads. Van Heerden was also surprised, he confessed, with how “tranquil” the floor at Foxconn plant is compared with a garment factory.
I was very surprised when I walked onto the floor at Foxconn, how tranquil it is compared with a garment factory. So the problems are not the intensity and burnout and pressure-cooker environment you have in a garment factory. . It’s more a function of monotony, of boredom, of alienation perhaps.
He speculated that workers are jumping out of windows to take their life due to boredom and alienation stemming from repetitive assembly tasks:
Apple’s contract manufacturer Pegatron Technology of Taiwan is unaware of any forthcoming labor inspections at its Asian plants because its client has not officially tipped them about labor audits, according to Chief Financial Officer Charles Lin tells to Bloomberg. Lin was reacting to yesterday’s announcement by Apple of California that the first audits in cooperation with the Fair Labor Association have started at Foxconn City in Shenzhen, China.
Pegatron Corp., a maker of Apple Inc.’s iPhones, said it hasn’t been informed of any pending inspections of factory work conditions by labor groups, a day after the U.S. company said checks would start this spring. Pegatron is aware of Apple’s corporate social responsibility policies, Charles Lin, chief financial officer of the Taipei-based company, said by telephone today. The client hasn’t informed him about any upcoming audits, Lin said.
Apple previously confirmed that audits at Pegatron and Quanta Computer, the company assembling Mac notebooks, are due this spring. The company said the results of FLA audits will be made available on its website at the end of March. In the wake of the Foxconn scandal, a month ago Apple became the first technology company admitted to the FLA. That announcement followed Apple’s release of 2012 Supplier Responsibility Report that for the first time named 156 companies currently supplying components for Apple products, which left only three percent of suppliers absent from the list.
Following the release of Apple’s “2012 Supplier Responsibility Report,” Apple announced it would be the first technology company admitted to the Fair Labor Association. The FLA will “independently assess facilities in Apple’s supply chain,” and then publish its independent findings online. Apple announced through a press release today that the first audits have officially started with FLA President Auret van Heerden and his team beginning inspections at Foxconn City in Shenzhen. Apple CEO Tim Cook said the audits are “unprecedented in the electronics industry”: Expand Expanding Close
Consumer groups SumOfUs and Change.org are waging a war over the working conditions at Apple’s (and the rest of the electronics industry’s) main outsourced manufacturer Foxconn. The groups said that over 35,000 people signed their “Stop Worker Abuse” online petition in just 24 hours. Today, the groups announced they would deliver a quarter million petition signatures to Apple.
Furthermore, a protest will be staged tomorrow at 10 a.m. outside Apple’s new Grand Central Terminal retail store and representatives from both SumOfUs and Change.org promised to join the protesters. Change.org’s Mark Shields called abusive working conditions at Foxconn factories “appalling,” adding he was shocked to learn about them.
The two consumer groups are demanding that the iPhone maker release a worker protection strategy for new product releases because these are the instances “when injuries and suicides typically spike because of the incredible pressure to meet quotas timed to releases.” They are also pressuring Apple to publish the results of Fair Labor Association’s audit (to which the company willfully agreed): “Including the NAMES of the suppliers found to have violations and WHAT those violations are, so that there is transparency around the monitoring effort.” The petition (found here) opens with an interesting paragraph:
After The New York Times published a lengthy two-part piece covering the controversial working conditions of Apple’s supply chain within Foxconn factories in China, other publications are doing their own investigative work to find out more informtion. The NYT’s second installment brought us the backstory of Foxconn worker Lai Xiaodong leading up to his death at a factory explosion in Chengdu. Today, CNNpublished a video of journalist Stan Grant who recently sat down for an interview with a current Foxconn employee and iPad display assembler:
“I can’t bear it anymore. Everyday was like, I get off from work and I go to bed. I get up in the morning, and I go to work. It became my daily routine and I almost felt like I was some kind of animal.”
The video starts off with Grant showing “Miss Chen,” who requested her name be changed for the interview, and the finished iPad she helps assemble on a daily basis but has never used. Miss Chen told CNN her Foxconn bosses informed her not to talk with media or “criminal liability shall be investigated according to law.” Chen, a poor Chongqing university student, said she took the one-month job with no experience on promises of “great benefits and little overtime.” Chen described her experience upon arriving at Foxconn: Expand Expanding Close
Apple and Foxconn are continuing to work on bringing that $12.5 billion iPad plant in Brazil online (there have been no iPads “Made in Brazil” seen yet, unlike iPhones). Meanwhile, the country’s Secretary of Planning and Development of the State of São Paulo Julio Semeghini revealed today that Apple’s favorite contract manufacturer will build up to five factories in Brazil with a thousand employees each.
According to a local report by Folha.com, Foxconn of Taiwan (also known as Hon Hai Precision Industry Co.,) will leverage the additional plants to build notebooks and PCs, electronic components, connectors, batteries and precision machine elements. The plants should be located in Jundiai; São Paulo and business negotiations will resume when the Chinese New Year wraps up, according to the secretary.
The development could indicate plans to assemble an even greater portion of Apple products in Brazil, not just iPads and iPhones. Even so, poor machine-translated text suggested the secretary said, “The parts produced here will also help in the assembly of Apple products,” as “the company starts to import kits for assembly in Brazil iPad and iPhone.”
UPDATE: A Foxconn representative refuted the story, dismissing it as “pure speculation” amid what appears to be a power struggle over the Taiwanese firm’s billions of dollars in potential greenfield investments in the country. Foxconn, which already operates six plants in Brazil, wouldn’t acknowledge that iPhone or iPad production is taking place in any of the existing facilities.
UPDATE: Reader MarckOliver has submitted the following translation:
Parts produced in Brazil will aid in assemble of Apple products, said the Secretary. For now the company will import those kits from China to assemble in Brazil.
Reader Renato Selman concurs, telling us that while Foxconn will just assemble Apple gear using imported parts, “in the future Foxconn will use other components produced in Brazil”.
[vodpod id=Video.16028592&w=425&h=350&fv=pid%3DA15fgfffkgihmohhnil053%26amp%3B] Thousands apply for jobs at Foxconn factories in China. Expand Expanding Close
After the NYTimes exposé and Tim Cook’s response, the question remains: Why is the media focusing on Apple and not questioning any of the other electronics companies that manufacture with Foxconn in China?
Obviously, Apple has the money, the brand, the prestige, and it grabs attention. However, it is not like Apple can make gold from straw. Apple simply cannot build its products anywhere other than China.
On the flip side, @NicePaul takes recent Forbes numbers and creates the following infographic that illustrates the opposite point:
We heard earlier today that the next iPhone may have a bigger screen which could make the chassis slightly bigger. How do you feel about this? What size would you prefer?
The short of it is that companies like Apple simply cannot manufacture products in the United States. The cost (though it is cheaper in China) is not the reason, however. Years ago, the Chinese government subsidized building cities of factories that can hire 3,000 workers to live in a dorm per day —or 8,700 Industrial Engineers in two weeks (it would take 9 months to do this in the U.S.). Today’s gadgets require thousands of little parts that are all made in the same areas. This whole global supply chain cannot be moved to the U.S.
The most interesting tale might have been the last minute decision to make the iPhone’s display glass:
In 2007, a little over a month before the iPhone was scheduled to appear in stores, Mr. Jobs beckoned a handful of lieutenants into an office. For weeks, he had been carrying a prototype of the device in his pocket.
Mr. Jobs angrily held up his iPhone, angling it so everyone could see the dozens of tiny scratches marring its plastic screen, according to someone who attended the meeting. He then pulled his keys from his jeans.
People will carry this phone in their pocket, he said. People also carry their keys in their pocket. “I won’t sell a product that gets scratched,” he said tensely. The only solution was using unscratchable glass instead. “I want a glass screen, and I want it perfect in six weeks.”
After one executive left that meeting, he booked a flight to Shenzhen, China. If Mr. Jobs wanted perfect, there was nowhere else to go.
New screens began arriving at the plant near midnight.
A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.
For over two years, the company had been working on a project — code-named Purple 2 — that presented the same questions at every turn: how do you completely reimagine the cellphone? And how do you design it at the highest quality — with an unscratchable screen, for instance — while also ensuring that millions can be manufactured quickly and inexpensively enough to earn a significant profit?
Apple received a mention in a big way during CNN’s Southern Republican Presidential Debate held yesterday at the North Charleston Coliseum in South Carolina. The debate featured Republican Presidential candidates Mitt Romney, Newt Gingrich, Ron Paul, and Rick Santorum. At one point (mark 1:01:55), CNN host John King asked the candidates in the light of the ongoing Foxconn controversy to lay out their plans to bring back manufacturing jobs to the United States.
More precisely, King zeroed in on the fact that Apple is “a breathtakingly important American company” that employs most of its workforce in retail stores, but hires half a million low-paid workers through its Far East suppliers and contract manufacturers that actually assemble its products (just like any other technology company does, mind you). Santorum has “a plan in place” to put this strategy to an end (quote right below the fold), as do other candidates. They also talked SOPA and discussed other burning issues. Just watch the clip…
Earlier this week, Apple pledged to let the Fair Labor Association access its suppliers’ facilities to monitor working conditions. Even though Apple is the first technology company admitted to the FLA, the snowballing issue of harsh conditions at Far East plants will not go away with the announcement. Quite the contrary, the problem has escalated and gone mainstream, with both The Daily Show and This American Life focusing on the grim reality of earning a living at Foxconn-operated sweatshops in China.
Jon Stewart, The Daily Show host and chief satirist, remarked in an episode yesterday:
By creating a convenient ecosystem, China’s Foxconn draws in employees who earn 31 cents an hour working for 35 hours straight, thereby saving American companies money.
As you know, Foxconn (also known as Hon Hai Precision Industry) is Apple’s favorite contract manufacturer, it but also produces gadgets for Amazon, Microsoft, HP, Dell and a variety of other brands. With that said, both shows tackle larger issues that affect just about every electronics manufacturer. The last week’s episode of This American Life, the popular radio program, weighed in as well. You can listen to their free audio stream here.
According to the Japanese blog Macotakara (which can be accurate with Apple rumor reporting), Apple’s contract manufacturers Foxconn Electronics (also known as Hon Hai Precision Industry) and Pegatron Technology have issued orders to begin assembly of next-generation iPads for an early-March launch.
The report is based on unnamed Chinese sources, and it noted the iPad 3 will look virtually identical to iPad 2 while featuring the same hardware button configuration, shape of the dock connector and position of the two cameras. Even the Smart Cover will work with iPad 3; although, tipsters mentioned magnets will be placed in a “different position.” Some form fitting cases may not work, however, as the device is slightly thicker, probably to accommodate added parts.
Such a description validates yesterday’s iLoungestory based on editor Jeremy Horwitz’s alleged hands-on experience with an iPad 3 prototype that he said is focused on internal changes rather than chassis redesign. Macotakara also noted that Sharp would provide panels for the device that sport a 2048-by-1536-pixel resolution. This is in line with earlier reports by DigiTimes and the Wall Street Journal.
Since CNET posted the iPhone 5 story this weekend…
…the iPhone 5 is a “complete redesign. This is a very large project that Steve dedicated all of his time to. He was not that involved in the 4S because his time was limited.”
…we thought it would be a good time to tell you what our sources think happened to the iPhone 5 that some were expecting. We’ve heard from Foxconn managers as well as Apple employees and carrier partners on this and have tried to piece together the full story.
The iPhone 4S as you see it was originally planned to be released at WWDC with iOS 5, like every iPhone before it.
But something happened around February of this year that threw everything off. Apple was still integrating the Siri team and code into iOS and it was going much slower than planned. In February, Apple knew they weren’t going to be able to get an iOS 5 Beta to developers in April and they sure weren’t going to have a stable version by WWDC. They would be lucky to get a final version of Siri into customers’ hands by the holiday shopping season (Siri is currently in Beta in three languages).
At the same time, Apple’s iPhone 5 (teardrop) plans were moving along on or ahead of schedule and the first prototypes were testing well. CNET says that Steve Jobs was overseeing this project which sounds about right.
With mid-October being the earliest possible date of a Siri-fied iOS being ready – with “Apple-levels” of polish –Apple had to look at its options. Would they release the iPhone 4S at WWDC with a modified version of iOS 4? Without Siri and the other iOS 5 improvements, the update might have seemed a little bland to the average customer.
We passed up the New York Times iPhone story earlier because it didn’t really contain any new product information. We’ve been hearing early October for awhile now in terms of when the iPhone gets released. Therefore, the announcement in ‘weeks’ isn’t news either.
two people with knowledge of the inner workings of Apple’s next-generation iPhones say either the iPhone 5 or iPhone 6 will include a new chip that is made by Qualcomm.
Helpful.
But here’s some real info: We’ve heard that there are indeed two different models of iPhone coming out next month (announced this month?) We still think October 7th is the scheduled release date give or take any delays. We’ve heard the low-end model, which is essentially an iPhone 4 look-alike (glass front and back), is rolling off the assembly line in big numbers right now. Apple expects to have 10+ million of these things on hand for launch and full ramped production into the holiday shopping season. These will be priced aggressively and be everywhere.
A new report from Taiwan Economic News claims Apple’s main supplier Foxconn has significantly upped its iPad 2 shipment estimates from 14 million to 20 million units for Q3. The report notes this marks a significant “42.8% increase from its original projection” made in July. This confirms previous reports for third quarter estimates we told you about last week. Expand Expanding Close
TmoNewsthinks it scooped a possible evidence that Apple will be announcing its next iPhone in about two weeks time. The site cites “a huge number of emails” they received, which apparently mention “that T-Mobile has called an “All Hands Day” meeting for September 24th for unknown reasons”. September 24 is a Saturday, ruling out the possibility of an Apple media event that day. It could be also just T-Mobile prepping for another product arrival, such as the Galaxy S II, or some non-Apple related marketing and sales initiative. Also, Boy Genius Report offers that the memo actually refers to a high-volume day, which does not compute since iPhone 5 is not expected to hit stores before October.
On the other hand, 9to5Macheard that Apple could begin accepting pre-orders for the next iPhone as early as Friday, September 30. If T-Mobile USA gets the handset, as rumored, they would want to brief employees at least a week before pre-orders start. And T-Mobile holding a meeting on Saturday, September 24, could mean an Apple media event earlier that week, in which case invites should be sent out sometime in the next week or so. Expand Expanding Close
Somewhere in China there are stacks of millions of completed iPhone 5s.
Digitimes is reporting that iPhone 5 production is at full swing with 150,000 of the devices being produced per day. That isn’t quite the “volume” production level that Apple expects as it gets ready to release its phone for the holiday shopping season, however.
Lens maker Largan Precision, touch panel maker TPK Holding, reinforced glass supplier G-Tech Optoelectronics and battery vendors Simplo and Dynapack are all operating at full swing currently, the sources indicated.
We’ve also heard recently that these iPhones aren’t being boxed up just yet as Apple is finalizing the iOS 5 build that will eventually go on these iPhones.
Shipments of iPhone 5 from the supply chain are expected to reach 5-6 million in September but will then ramp up to over 22 million units in the fourth quarter as suppliers will ship fewer iPhone 4 and CDMA-version iPhones during the final quarter of the year, noted the sources.
Apple’s other manufacturing partner, Pegatron, is said to be holding off on production until 2012 and is expected to only build 15% of the devices overall. Expand Expanding Close
Interesting that Hon Hai Precision Industry, better known as Foxconn, issued a statement regarding Steve Jobs’ resignation from his CEO post at Apple. The Asian company wrote in a short email statement to Bloomberg:
Foxconn wishes Steve Jobs will get well. We think Tim Cook has shown good work as stand- in CEO during Jobs’s absences and expect Apple will perform well in the future. The relationship between Cook and Foxconn has been very close and we expect that the relationship will become even closer in future.
Asian companies are traditionally tight-lipped and shy away from commenting on their partners’ business dealings so it’s a bit surprising Foxconn would put out a statement, let alone touch on the subject of Steve Jobs well-being. On the other hand, Foxconn is Apple’s largest contract manufacturer and as such has been instrumental in ramping up manufacturing to meet the growing demand for Apple’s gadgets around the globe. Expand Expanding Close
Digitimes is reporting Apple has turned to manufacturers other than LG Display (specifically Samsung and Chimei Innolux) due to issues with the 9.7-inch panel they’ve been producing for the iPad 2. Apparently LGD was not only unable to meet its July orders by approximately 1 million units, but also failed to meet Apple’s requirements in impact tests.
Due to the manufacturing issues with LGD, Digitimes reports they have now turned to alternate supplier (and rivals in the tablet market) Samsung. However, this may be only a temporary solution to the supply problems, as the report is quick to point out Samsung is directly competing with the iPad 2 with their Galaxy Tab 10.1 (the same device Apple just received a preliminary injunction for to halt sales in the EU).
According to the report:
“Samsung’s Galaxy Tab has head-on competition with the Apple iPad 2 in the end market. This would prevent Apple from sourcing more panels from Samsung.”
This might be an indication that Apple is focused on transitioning away from Android-related manufactures, if for no other reason, simply to avoid having to rely on their competition to supply vital components. Doesn’t look like LG’s $500 million display deal with Apple will be getting extended anytime soon, and a recent lawsuit launched against Apple (linked back to LG) certainly doesn’t help either. Expand Expanding Close
Foxconn’s founder and chariman Terry Gou said the company will replace an unspecified amount workers with one million robots in three years. Foxconn is the Asian manufacturer that is responsible for many components inside of Apple, Sony, and Nokia’s devices. Currently, the company has 10,000 robots and will expand to 300,000 next year, gradually opening the door to a total of one million robots in three years.
One interesting aspect of a robotized workforce is that it makes places with more expensive workers more competitive.
The robots will be used to accomplish basic tasks like spraying, wielding, and assembling. Foxconn currently employs 1.2 million people, therefore one million robots could potentially be a big hit on employment in China. Expand Expanding Close
Taiwanese trade publication DigiTimesquotes unnamed industry sources who claim Foxconn, the world’s largest contract manufacturer for gadgets, will produce a rumored Android-driven tablet from Amazon, said to sport a 10.1-inch display, with shipments to begin in 2012 at the earnest. Quanta Computer, another contract manufacturer from Asia, has already begun shipping a smaller seven-inch device to Amazon, the report notes:
Foxconn Electronics (Hon Hai Precision Industry) has reportedly landed orders for 10.1-inch tablet PCs from Amazon with shipments to begin in 2012, while Quanta Computer has begun shipping a 7-inch model to Amazon. Foxconn declined to comment on market speculation.
Foxconn of course is Apple’s long-time manufacturer so it comes as a surprise that Apple did not exercise its influence and billions to block rivals from tapping Foxconn’s manufacturing potentials. That’s not entirely unheard of, however…
A report from Bloomberg today confirmed Foxconn is interested in hiring new safety and security experts to help improve working conditions in facilities responsible for supplying Apple products. Foxconn’s retail division chairman Louis Woo confirmed the job listings, which include a “lifestyle manager” responsible for maintaining worker dorms and healthcare, a safety and security expert, and two fire chiefs: 
