Yesterday, Apple's market valuation crossed US$500B making it the most valuable company[Link]. This is a milestone in Apple's incredible comeback from the brink in 1996. I remember the stock price slumping to US$7 and Michael Dell was asked what he would do if he was running Apple. He said he would close it and return the remaining cash to shareholders. Today Apple's stock trades at US$542. No other company in the world has made such a stunning comeback. No other company is as profitable as Apple. Apple today has US$100B in cash. Apple makes US$13.3B in profits vs US$3B for Walmart.
Many years ago, Apple owned factories in Ireland and Singapore. The worker on the assembly line making Apple's iMacs was an employee of Apple and had a share of Apple's success. Today, Apple\s manufacturing is outsourced to companies in China. The devices are made by lowly paid workers, squeezed by a middleman who profits by exploiting workers in a country where human rights and workers' right is not well respected.
"But those popular devices come at a human price — some of the low-paid workers who built them got their skin burned off or jumped to their deaths. Would you be willing to boycott Apple to stop the carnage?"
"....Of these, the most .horrible reported by the Times was Lai Xiaodong — a college educated manager who was planning to marry. Mr. Lai’s face was burned off along with the skin on 90% of his body thanks to a May 2011 explosion at an iPad factory caused by a well-known problem — an abundance of aluminum dust — where he managed a team of workers polishing iPad screens. Mr. Lai took two days to die of his burns."- Forbes[Link]
Apple is by no means the only company that outsource its manufacturing, but it is the most profitable and most powerful. If Apple does not do something about this situation, no other company will. Labor cost only form a tiny fraction of the cost and Apple has a profit margin of more than 70% on each handset sold[Link]. Apple CEO Tim Cook took home US$378M in compensation last year [Link] and this disparity between him and the worker in Shenzhen working 12 hour shifts shows the dark side of outsourcing. There is a human cost to satisfy our insatiable thirst for beautiful electronic products and we should forget this when we think of buying the iPad 3 to be launched next month.