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Foxconn Raising Prices to Avoid Further Suicides

By - Source: Tom's Hardware US | B 78 comments

Foxconn is passing some of those increased wage costs onto its clients.

Hon Hai, or Foxconn, is essentially the manager of one of the world's major electronics factories. Foxconn is one of the premier manufacturers of electronics designed by Apple, Nokia, Sony Ericsson, Microsoft, Dell, HP, among many others.

Although Foxconn is usually in the background, as the designers and sellers of the electronics take the spotlight, the manufacturing company has been under scrutiny for the working conditions that it gives to its workers.

A flurry of suicides cast a light on Foxconn and its employment practices. In response, Foxconn vowed to improve working conditions as well as increase wages (though there's still some question as to how effective the changes are). Such increases come at an added operating cost for Foxconn, and some of that cost is going to be passed on to the company's clients.

According to Reuters, Foxconn will be raising prices starting this month for some of the services that it provides to its clients, including Apple. Given that iSuppli estimates that the iPhone 4 costs $6.54 to make in China, it's doubtful that Apple will be feeling any sort of pinch from a higher rate.

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  • 35 Hide
    figgus , October 14, 2010 12:14 PM
    bloodlust2222This is funny Sh*t. So by them raising prices it's going to decrease suicides? Maybe someone should tell them to give there employees raises. I have a hard time believing the price increase is going to go into the workers hands. I guess teh CEO needed something to justify the increase. Good excuse.


    Did you even READ the article?
  • 31 Hide
    g00fysmiley , October 14, 2010 12:15 PM
    so apple will be charged an extra dollar or two per device and add a couple hundred to the final price claiming its thier supply parts companies raising prices.. its iCONomics
  • 23 Hide
    silentq , October 14, 2010 12:18 PM
    Apple is not overpriced enough? Yeah, just give Jobs another reason to crank up the prices.
    Jobs: "We incresed the price of iPhone 4 from $799 to $999 because Foxconn raised it's production value from $6.54 to $6.75 in order to compensate the workers and decrease suicides. Apple simply follows the rules."
Other Comments
  • 35 Hide
    figgus , October 14, 2010 12:14 PM
    bloodlust2222This is funny Sh*t. So by them raising prices it's going to decrease suicides? Maybe someone should tell them to give there employees raises. I have a hard time believing the price increase is going to go into the workers hands. I guess teh CEO needed something to justify the increase. Good excuse.


    Did you even READ the article?
  • 31 Hide
    g00fysmiley , October 14, 2010 12:15 PM
    so apple will be charged an extra dollar or two per device and add a couple hundred to the final price claiming its thier supply parts companies raising prices.. its iCONomics
  • 23 Hide
    silentq , October 14, 2010 12:18 PM
    Apple is not overpriced enough? Yeah, just give Jobs another reason to crank up the prices.
    Jobs: "We incresed the price of iPhone 4 from $799 to $999 because Foxconn raised it's production value from $6.54 to $6.75 in order to compensate the workers and decrease suicides. Apple simply follows the rules."
  • 20 Hide
    JimmiG , October 14, 2010 12:21 PM
    The only reason stuff is so cheap these days is because it's made by slave workers in Asia. If everything was being manufactured in the EU, US etc., with the wages and working conditions people expect, your motherboard wouldn't be $150, it would be $1500.
  • 16 Hide
    hoof_hearted , October 14, 2010 12:30 PM
    What bugs the crap out of me is the fact that Apple only pays $6.54 per phone. Where does the rest of the money go? Hell, I'd for $100 for a Foxconn iClone, cutting Apple out of the picture and giving Foxconn an extra $93.46 per unit to spread between the CEOs and workers. It is win-win for everybody except Apple.
  • 4 Hide
    cronik93 , October 14, 2010 12:33 PM
    Will they raise quality of there mobo's with that?
  • 13 Hide
    xrodney , October 14, 2010 12:34 PM
    JimmiGThe only reason stuff is so cheap these days is because it's made by slave workers in Asia. If everything was being manufactured in the EU, US etc., with the wages and working conditions people expect, your motherboard wouldn't be $150, it would be $1500.

    Doubt difference will be more then 20-30$.
    As already said by some companies making electronics, salary is making only ~20% of manufacturing expenses.
  • 0 Hide
    chickenhoagie , October 14, 2010 12:34 PM
    great, foxconn will charge these rich companies extra for better employee wages as they properly should, then the big companies will go an extra mile to rape us even harder and throw on 3 times the price and say to us that they're compensating for the bad market.

    oh well..we all hate CEO's but i guess thats life.
  • -2 Hide
    andrewcutter , October 14, 2010 12:42 PM
    beamthegreat@ hoof_hearted and all the apple haters out there. The 6.54$ is just the cost for assembling an iphone 4 NOT the price of the material uses to build it. WHy are people so stupid here?

    :o 
  • 1 Hide
    tomate2 , October 14, 2010 12:43 PM
    i was wondering when that was going to happen... foxconn has been doing a lot about these suicides... the money for that has to come from somewhere
  • 8 Hide
    Anonymous , October 14, 2010 12:47 PM
    Cheap labor is the new slavery. Slavery wasn't free back in the day, you had to feed them, so the slaves worked your field, and consumed part of the harvest. Contrary to republican propaganda, the US was never truly prosperous or powerful until after WW2, especially the south where slavery was most prevalent.

    By the same token, the US has never been prosperous since we gave up on job protectionism to pursue cheap-labor AKA neo-slavery. It's been one continuous downhill slide, and it won't get better until we move jobs back here, and pay a living wage for them.
  • 11 Hide
    jomofro39 , October 14, 2010 12:50 PM
    Poor slave workers in China. They aren't even allowed to know any different. :(  I hope the curtain comes down soon and frees these citizens from the gold-clasped clutch of their "communist" government. This is NOT what Marx envisioned.
    I wonder what the salary increase is. Didn't they double it or something a month ago? From a nickel to a dime a day?
  • -5 Hide
    Anonymous , October 14, 2010 12:54 PM
    It would be interesting to know where did the author of this article read about that iSupply value... Because according to iSuppli: "iPhone 4 Carries Bill of Materials of $187.51, According to iSuppli"
    http://www.isuppli.com/Teardowns-Manufacturing-and-Pricing/News/Pages/iPhone-4-Carries-Bill-of-Materials-of-187-51-According-to-iSuppli.aspx

    This is very low quality research, to say the least...
  • 6 Hide
    nukemaster , October 14, 2010 12:55 PM
    Will we soon see a card with our product saying "No employee committed suicide during the creation of this device". It will be just like the "not tested on animals" tag....
  • 6 Hide
    kriminal , October 14, 2010 12:56 PM
    i like how ppl read this article and then procede to bash apple.. :) 
  • 14 Hide
    nukemaster , October 14, 2010 12:57 PM
    js1234It would be interesting to know where did the author of this article read about that iSupply value... Because according to iSuppli: "iPhone 4 Carries Bill of Materials of $187.51, According to iSuppli"http://www.isuppli.com/Teardowns-M [...] uppli.aspxThis is very low quality research, to say the least...

    187.51 is the parts the $6.54 is the assembly cost.
  • 8 Hide
    jedi940 , October 14, 2010 12:57 PM
    xrodneyDoubt difference will be more then 20-30$.As already said by some companies making electronics, salary is making only ~20% of manufacturing expenses.


    That's 20% if current salaries. If you factor in the low pay and exchange rates and cost of living, that would make a huge difference. Some places people are living on a U.S. dollar a day. Now in the U.S. that is way below what would be necessary but in other countries, that dollar will go alot further. Say you have 100 workers making 1 U.S. dollar a day. Your daily cost for labor of manufacturing is $100 U.S. Now if that same product were made in America where the minimum wage is $7.25/hr those same 100 workers would cost the manufacturer $5800 per day. That is a 5800% increase. Now I'm not condoning extreme working conditions where peoples lives are in danger and deaths are occuring due to the conditions, however, other countries that have lower costs of living along with fewer government safety regulations that must be implemented, it will always be considerably cheaper for the producer to use overseas labor.
  • 2 Hide
    g00fysmiley , October 14, 2010 1:03 PM
    js1234It would be interesting to know where did the author of this article read about that iSupply value... Because according to iSuppli: "iPhone 4 Carries Bill of Materials of $187.51, According to iSuppli"http://www.isuppli.com/Teardowns-Manufacturing-and-Pricing/News/Pages/iPhone-4-Carries-Bill-of-Materials-of-187-51-According-to-iSuppli.aspxThis is very low quality research, to say the least...



    actually its great research... its how much they charge to MAKE the phone... as in put the pieces together not the cost of the actual parts
  • 0 Hide
    dude846 , October 14, 2010 1:14 PM
    I look forward to Foxconn article pictures. I mean look at the person on the right...
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