Finding an ‘ethical’ smart phone

By Ethan Nobles on 1:09 AM

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Yes, we’ve all heard the rumors by now – Foxconn is apparently up to no good.

Foxconn, of course, is the Taiwanese subcontractor that makes a ton of electronics. Check out MakeITFair for reports on horrid Foxconn labor conditions in China, forced internships, riots, suicides, child labor and all sorts of awful things.

While most of the shenanigans in Foxconn’s Chinese factories are associated with the iPhone 5, singling out Apple isn’t entirely fair. Foxconn makes a lot of electronics for manufacturers all over the planet and, no, the company just doesn’t supply cheap labor for smart phones made by Apple.

Here’s the problem – is there such a thing as an “ethical” smartphone? You know – one that isn’t made by indentured servants under awful working conditions? That question is hard to answer.

Before I go farther, I’ve got to confess I’m a bit biased. I’ve had an iPhone 4. Hated it. I’ve got an iPhone 4S. I hate that one even more. The chances are very good that I’ll hate the iPhone 5, too – I’ve played with one, but not long enough to inspire that “I ought to throw this thing out of my car window” hatred that I’ve developed for every iPhone I’ve owned. In other words, searching for an ethical smart phone is easy enough for me. I’m not buying another Apple product when I’m due for a renewal with AT&T in a few months, so trying to find something that’s not put together by virtual slave labor isn’t a problem for me. I’m not tied into Apple by any means, so I’ve got some options.

By the way, there’s a certain irony in the fact that the most easily exploitable labor in the world appears to be in the largest communist regime on the planet, but I’ll leave that discussion for another time.

At any rate, finding that ethical cell phone is quite difficult as it seems electronics are manufactured by the cheapest labor available by most companies. Want proof? Have a look at this article and notice how virtually all of the companies listed seem to have a lot of evil in their supply chains. Apple scores horribly on the report referenced in that article while RIM (the failing manufacturers of Blackberry) comes out near the top of the heap. If you don’t want to be stuck with a dying line of phones, you’ll notice that HTC – which makes pretty solid lines of Android and Windows phones – comes out OK.

Yes, it seems that HTC – a Taiwanese company – is doing what it can to keep most of its manufacturing at home where labor laws are actually enforced by the government. There’s always the argument that Apple is an American company and, as such, buying from it is better for the U.S. economy. That’s a curious argument, to be sure, as it appears Apple seems to hoard its profits and dole out some cash to American employees and investors.

If Apple really wanted to boost the U.S. economy and dodge those nagging accusations of using easily exploitable labor, perhaps the company should take a page from HTC’s book and actually building the things in its home country. Yes, there’s always the argument that American companies would be forced to jack up the prices of their stuff if they used domestic labor, but there’s something curious about that claim.

Here’s the thing – according to this article, it costs Apple $167.50 to build a 16GB iPhone 5. While it costs a cell phone customer $199 to get that same iPhone under contract, bear in mind that the build of the phone is paid off throughout the length of that contract. Customers actually wind up paying $649 for the phone (that’s the cost you’d pay if you bought an unlocked one direct from Apple). That adds up to a profit for Apple of $481.50 per phone. So, here’s the question – that’s a lot of room for a solid profit. Why not pay some American workers a bit more and realize a profit of, say, $100 or $200 per phone?

Perhaps that old line about U.S. manufacturers having to resort to cheap, foreign labor in order to keep costs to consumers down is a bunch of nonsense. It may be more likely that they’re mostly interested in maximizing profits to an obscene degree at the expense of the U.S. economy.

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