Counterparties: Apple’s “headaches”

September 24, 2012

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The most telling quote about Apple’s recent stumbles didn’t come from CEO Tim Cook. It came last month from Terry Gou, the chairman of Apple manufacturer Foxconn. Discussing the rise of robots in production Gou said: “As human beings are also animals, to manage one million animals gives me a headache”.

If you’ve been in a coma, Apple’s “animals” have been quite productive lately: The iPhone 5 came out last week, selling some 5 million phones in three days. In a few years, Apple could very well be the first company valued at $1 trillion. But, yes, there have been “headaches”. Riots shut down Foxconn’s factory in the Chinese city of Taiyuan on Monday. Reuters reported that at least 40 people were hospitalized, and 5,000 police were dispatched — though it’s unclear if the riot came from a fight among workers or in a clash with guards. Engadget’s Richard Lai has pictures.

A reporter from the Shanghai Evening Post recently went undercover in the Taiyuan plant and, if this rough translation from Micgadget is accurate, got to experience what it’s like to produce an iPhone 5:

An iPhone 5 back-plate run through in front of me almost every 3 seconds. I have to pickup the back-plate and marked 4 position points using the oil-based paint pen and put it back on the running belt swiftly within 3 seconds with no errors. After such repeat action for several hours, I have terrible neckache and muscle pain on my arm… We worked non-stop from midnight to the next morning 6 a.m but were still asked to keep on working as the production line is based on running belt and no one is allowed to stop. I’m so starving and fully exhausted.

Apple is struggling to meet demand for their latest phone, but it’s also struggling to manage its users’ expectations. If you were puzzled to have your iPhone tell you that Las Vegas has melted, you’re likely familiar with the well-documented problems with its new maps program. To Anil Dash, Apple’s ditching of Google maps for its own undercooked program shows blatant disregard for users: “Given that Apple has a bigger cash hoard than the vast majority of countries, it seems as if this is more an issue of priorities than resource constraints”. Joe Nocera, for his part, wonders if Apple has peaked.

Kontra at Counternotions – nice blog name, by the way — suggests another answer: With nearly half a billion users, Apple simply has us all at its mercy. We’ll just have to wait for Apple to wow us with a better product. “Apple has a justifiable fear of key third parties dictating terms and hindering its rate of innovation,” he writes, adding, “Yes, Apple’s evil”. — Ryan McCarthy

On to today’s links:

New Normal
How climate change is reshaping Greenland’s economy (and its culture) - NYT
Free checking is getting more expensive - WSJ

China’s car obsession is creating “weapons of mass urban destruction” - FP

US surgeons operate on the wrong body part as often as 40 times a week - WSJ

The Fed
You really, really don’t need to rush to buy a home - Pragmatic Capitalism
Goldman: QE3 could total up to $2 trillion and last until 2016 - Calculated Risk

Japan’s problem: debt “backed only by an aging, shrinking population of taxpayers” - Peter Boone and Simon Johnson

Having sex once a week rather than month is the “happiness equivalent” of earning an extra $50,000 - Guardian

Village Voice Media sold in a management buyout - Forbes

Profiles in Projection
If Joe Weisenthal were a Transformer, he would be a Bloomberg terminal - BI

42% of workers in the mining industry and 27% of finance workers are sleep-deprived - NYT

Crisis Retro
History repeats itself — in inflation fears – FT Alphaville

Mitt on airplanes: “the windows don’t open. I don’t know why they don’t do that” – LAT


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Re: Politicking. Felix, for most of today, you had this reference as “mittens”, not Mitt (yes, you did, and usually you cross out and explain, but you didn’t this time). I am neutral politically, but I simply cannot believe the level of bias you publish. I want to keep reading you, because you are really good at the economics stuff. But please, stop the gross political insults.

Posted by Curmudgeon | Report as abusive

Re: bias police. Curmudgeon, at this point if you’re going to spend all your time policing Felix’s diction on behalf of the Confederate Revival Fantasy Party and their Bumbling Campaigners’ Presidential Ticket, maybe it’s time you could explain your support to us. Tell me, how does the Ryan Budget solve the deficit? Do you really think it’s in our national interest to deny millions of women access to birth control? Have you volunteered to fight the war in Iran? Please, don’t be shy in your advocacy!

Posted by Dollared | Report as abusive

Curmudgeon, I believe that Ryan McCarthy was responsible for this post.

Foolishly clicked on that one before I realized who it was referencing. Playing on names is a cheap shot.

Posted by TFF | Report as abusive

@TFF, it’s not clear who posts on Counterparties. True, probably not Felix, but this is under his blog. @Dollared, I don’t believe either candidate will be a good President, but this is just a cheap shot by the Felix brand.

Posted by Curmudgeon | Report as abusive

@Dollared, I like reading Felix for the often oddball things that he writes about from an economic perspective. I would prefer that Felix stay relatively neutral in politics, but since he doesn’t seem to be able to, I would very much prefer that he not resort to insults like this.

I offer no opinion on who should be President, or why. Well, yes, I do. I prefer that neither candidate be President, and I suspect that many agree with me on this.

I like reading Felix. He is insightful and opinionated, often in a good way. But I’m not looking for someone to reinforce my political views. If that’s what Felix wants, count me out.

Posted by Curmudgeon | Report as abusive

How is the FoxConn line different from the chicken processing lines at US manufacturers? Or the giant warehouse picking jobs – which come with massive shocks when you touch metal? Or so many US jobs? Except of course they’re in the US. And may offer even fewer benefits than FoxConn, which at least pays well for China.

Posted by jomiku | Report as abusive

So Taiyuan has 5,000 police they can mobilize? That’s a lot of police.

Posted by blunderbot | Report as abusive

The fight at Foxconn was reported elsewhere as being between a restaurant owner and hands and the people who had to eat his food; presumably it was sub-standard and the customers threw it in his face.

Posted by FifthDecade | Report as abusive