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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