China Makes Almost Nothing Out of Apple’s iPads and iPhones – Forbes

Highly teachable case indeed! The fact is long known but the figures add power to the fact. Also, the author was saying manufacturing as a whole is going south in value. The real story is not that simple. Foxconn may be getting close to zero profit but the firm can use the Apple brand to get more orders from others. Also, it’s a supply -demand thing: manufacturing is down because so many in China are willing to do it for so little money. We should not be surprised one day manufacturing sector’s wage is higher because fewer want to do it.

My favorite fact of this past year was the proof that China makes almost nothing out of assembling Apple‘s iPads and iPhones.

here’s the real takeaway point from these numbers. Basic manufacturing, electronics assembly type manufacturing, simply isn’t a high value occupation any more. And the level of wages that can be paid in any particular occupation depend, inexorably, on the amount of value that occupation adds. So if electronics assembly adds little value then there simply cannot be high wages for those doing that work for it just isn’t a high value added occupation.

If you like, the end lesson here is that you can have lots of manufacturing jobs, sure, as Foxconn does, but they pay $400 a month maybe. And you can have high paying manufacturing jobs like at that Samsung plant in Texas, but you’re not going to get very many of them.

via China Makes Almost Nothing Out of Apple’s iPads and iPhones – Forbes.

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