Apple in China: Should We Applaud Instead of Condemn?

Apple is wrongfully taking heat for poor working conditions at Chinese factories that make iPads and iPhones, says's Tom Kaneshige. American consumers fixating on prices are really to blame. Here's why.

Mon, January 30, 2012

CIO — Apple publicly names its overseas suppliers. A New York Times article blasts working conditions there. CEO Tim Cook angrily rebukes the charges in an internal memo. Consumers call for a boycott of Apple products.

Sound familiar?

Americans go through a series of hand wringing about overseas labor practices every few years. I remember covering this very topic in the late 1990s when apparel giant Nike was getting wrung over the coals for perceived child labor violations in its Indonesian factory.

At the time, global technology integrators operating in China told me they were getting nervous. Nike was quickly becoming the poster boy for corporate greed, thus putting crosshairs on any American company doing business internationally. The term "global economy" was yet to catch on.

But the issues run deeper than merely denouncing China's working conditions, which seem deplorable through the lens of American standards. And it's wrong to wag a disapproving finger at American companies taking advantage of cheap overseas labor.

For starters, we're to blame for most of it. American companies are also responsible but in a good way. Lastly, the New York Times article portrayed Apple's Chinese supplier, Foxconn, in a harsh light, but I'd argue the opposite is true: Foxconn is an example of how far China has come.

Wanted: A Few Dollars More

Oscar Wilde once observed that people "know the price of everything and the value of nothing." The price of a product, it seems, is the only thing that truly matters to Americans. We expect an airline, for example, to offer stellar customer service even though we're quick to change airlines to save a few bucks.

When Apple delivered the iPad to the world two years ago, you might recall Apple fans cheering the low price. Apple had hit the $500 price point of the cheap netbook, even though most tech analysts thought the iPad would debut closer to $1,000.

Like the netbook, the iPad has lit the fuse of a pricing war. Hewlett-Packard's ill-fated TouchPad didn't start selling out until HP held a fire sale, slashing prices from $400 to $100. Amazon reportedly takes a loss on every $200 Kindle Fire it sells. The iPad 2 came out with the exact same pricing as the original iPad despite a boatload of new features: dual-core A5 chip, camera, thinner, lighter, etc.

We are a society fixated on price more than features, which is why American companies are forced to outsource manufacturing overseas to places like China where labor is cheap. And yet we cry foul over the horrible labor conditions there and hold American companies here accountable.

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