Why Apple can’t control its Chinese factories

While Apple is to be applauded for auditing its suppliers in an attempt to identify poor working conditions, its suppliers are so powerful that Apple can’t effect real change – and nor can any other tech company.

Malcolm Moore in Shanghai
Telegraph [UK]
5 March 2010

Last year, after a 25-year-old Chinese university graduate committed suicide at one of the factories that makes Apple’s iPhone, executives from the Californian company flew in for an urgent review.

Sun Danyong threw himself from the 12th floor window of his apartment block after an iPhone prototype went missing on his watch.

Before he jumped, he sent a message to a friend claiming that security staff at Foxconn, the notoriously secretive Taiwanese company that makes all of Apple’s mobile phones and the upcoming iPad, had beaten him severely.

The allegations deeply shocked Apple’s management, and there were calls for Foxconn to be fired. The Taiwanese firm, which operates a series of mega-factories on the Chinese mainland, has been described as “inhumane and militant” by China Labour Watch, a US-based NGO.

However, at the end of the day, Apple was powerless to change the situation. According to analysts, Foxconn and its two rivals, Quanta and Pegatron, are the only three companies in the world that are capable of quickly mass-manufacturing Apple products of the right quality.

Industry insiders said it is this triumvirate, and not Apple, that really holds the power in the relationship. “In the near term, there is absolutely nothing that Apple can do to shift away from these companies,” said Edward Yen, a technology analyst at UBS.

The article continues at the Telegraph.

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