As Apple desperately tries to repaint itself as a caring company when it comes to workers’ rights, news has emerged that employees in its suppliers’ Chinese factories get just $8 of the $499 sale price of each iPad 2.
Several news sources cite a Korea Daily report which claims that, based on average salaries, workers in the region get a 1.6 per cent slice of the pie, while Apple creams off $150 or around 30 per cent of the tablet’s retail price.
The figures are thrown into particularly stark contrast given that workers in Apple supplier factories in South Korea take home a much larger wedge - $34 per unit or 6.8 per cent of the sales price, according to the report.
The OECD’s South Korean representative, Kim Ki-jun, reportedly urged local businesses in the region to focus on entrepreneurship and innovation. He added that while tech giants will always locate manufacturing in regions with low labour costs, they could do more to reinvest their profits in said regions, according to Taiwanese news site WantChinaTimes.
Apple failed to respond to a request for comment.
The firm is fighting fires on several fronts in China this week. With consumer anger at the treatment of workers in factories run by suppliers such as Foxconn reaching critical mass, even CEO Tim Cook has been forced to publically admit conditions are bad, but that the firm is taking steps to change this.
On Monday it pledged to have these factories inspected by independent body the Fair Labor Association as part of a more rigorous Supplier Code of Conduct issued in January.
Meanwhile, Cupertino is also having to deal with a legal dispute over the iPad trademark which is not going its way. Reports emerged that Chinese officials in one city have already begun seizing iPad devices from stores following Shenzhen monitor firm Proview’s successful defence of its trademark claim in December.
Apple is appealing the decision but Proview has already upped the ante by asking a Chinese court to block all imports and exports too. Given that iPads are built in China, this could in theory completely throttle the firm’s supply chain.
The omens appear grim for the purveyor of shiny toys too, with Penn Olson reporting that e-commerce sites Amazon China and Suning.com have already removed the fondleslabs from their pages.
The only one ray of light in a dark week so far for Apple was the news that it is winning the hearts, minds and wallets of South Koreans, with iPads outselling Galaxy Tabs produced by local hero Samsung by a huge margin. ®