Apple Thinks that 'Globalization is Great' and with Wages at iPhone Plants being US$256/month, it's Understandable
In a new analytical report published by Kantar this week, I noted that Apple's iOS experienced growth across most major regions except for China where iOS dropped by a whopping 8.4% over the last three months alone as local smartphone brands are gaining momentum over Apple. As CEO, Tim Cook knows he has to reverse this trend in China and so in a speech delivered in China overnight, he sucked up to the Chinese as best he could so as to not lose favor with their government. The Wall Street Journal preferred to frame Cook's actions in a more politically correct fashion by characterizing it as a "Charm Offensive." Before delivering his speech, Cook came bearing gifts by announcing two new Research facilities aimed for China.
If a trade war was ever to break out between the U.S. and China, Apple would be one of the first companies China would punish – even with nice and shiny new R&D centers. While many top U.S. businesses have asked the Trump administration to be tougher with China on trade, Cook decided to side with China and bang the drum for globalization.
Cook noted during his hour long session at the government-sponsored China Development Forum that he thought it important for China to continue to open itself and widen the door because globalization "in general is great for the world."
China last year passed a controversial cybersecurity law that requires companies to provide technical assistance to authorities in investigations. While Apple was at the forefront fighting U.S. agencies on privacy, Cook and other U.S. executives generally shy away from criticizing Chinese policies publicly, as it rarely results in policy change and often draws blowback, according to the WSJ report. Some would characterize that as hypocrisy 101.
Specifically the Wall Street Journal pointed out that "Mr. Cook also said data privacy was one of the company's values, although he stopped short Saturday of criticizing decryption demands from governments as Apple has previously in the U.S."
As far as globalization being "great for the world" – well, Cook should have said that it was really great for Apple. In a report earlier this week, the Nikkei Asian Review spoke with Apple iPhone supplier Pegatron. Pegatron's CEO S.J. Liao made commentary that happened to support the position that we've taken that Apple loves slave-like labor and why iPhones won't be made in the U.S.
In a stunning revelation, Pegatron was complaining that wages have sky rocketed from US$191 a month to US$256 prompting them to bring more automation on board in their factories.
So of course "globalization is great" if you can get labor at that price or even lower in India. So while this is great for shareholders, it's not good for the U.S. worker any way you look at it.
Of course in context, it's not an "Apple" thing to want to make outrageous profit margins on the backs of foreign slave-like labor, it's a business philosophy in general. But Free-Traders and Globalists are not the friend of putting people to work in the U.S., period, and Cook has made it crystal clear what side of the ledger he's on.
Apple only has one thing going for it at present: high priced iPhones. If that ever weakened, their glory days are over.
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