Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
To the chagrin of some, Apple has recently come under attack (again) for its history of sourcing its profit-heavy hardware from factories in China that have a history of questionable working conditions. This is of course not a new claim as this issue seems to come to the attention of the broader media and increasingly to celebrities with Twitter accounts from time to time.
I have for the most part avoided harping on Apple for these issues as the company is not alone in sourcing electronics equipment from Asia and I always felt there were lighter issues at which to poke fun at Apple for. (iPad? Really?)
However, as Apple seems to be amassing a stockpile of cash rivaling the economies of 99% of the countries in the world, I felt it’s perhaps now time to throw in my two cents.
While it has remained relatively quiet on the issue beyond touting the safe working conditions of its factories, Apple has really not done much publicly to quell the maelstrom. It has gone about posting record earnings and vying with oil giants for title of “World’s Most Valuable Company!”
But, maybe Apple might be better served looking at opening up a factory in its home country. How difficult would it be for Apple to open up a factory in the United States to satiate that portion of the population that would be interested in getting their precious Apple products from a more local source? I understand that in the beginning most of the content for those devices would continue to be sourced from international locations, but I would think in time the draw of such an operation would attract businesses to open up facilities nearby to provide those pieces.
I am not saying that Apple should open up a domestic manufacturing plant in Silicon Valley, but there seem to be a number of states that have managed to attract foreign automotive manufacturers with a mix of tax breaks and cheap land that would seem ideal for such an operation. Heck, Apple found a willing partner in North Carolina for its server farm.
I would also allow that the cost of the products built domestically would cost a premium when compared with those sourced from China, but I would also guess that enough consumers would be willing to pay a premium to have their Apple product manufactured in the United States. What sort of premium? Well, in the non-smartphone space, it seems people are already comfortable paying a premium for Apple products, and can’t see where raising the price another $100 to $200 for a tablet or personal computer will impact that trend.
In the smartphone space, pricing is a different matter. Apple has managed to sell a boatload of iPhone’s across the United States because the device is priced similar to other smartphones of lesser pedigree. This is mostly due to wireless carrier’s subsidizing the price of those devices so that they can hit that $200 price point. This subsidization cannot be downplayed as carriers have taken short-term financial beatings on this practice in exchange for long-term return.
More recently, some carriers have begun to price “premium” devices at the $300 price point with a two-year contract that has allowed them to offset some of that subsidy or at least ensure that those devices that might cost more to produce are not taking an even deeper piece out of profits. Even Apple’s 32GB iPhone 4S is priced at $299 at most carriers despite my belief that the extra 16 gigabytes of memory over the standard $199 iPhone 4S 16GB costs Apple nowhere near that $100 price differential.
My suggestion would be to continue offering a Chinese-made, entry-level iPhone device at the $200 price point, but then allow consumers the option of buying a similarly-spec’d model built in the United States for let’s say, $300.
Apple could also help spice up the attractiveness of those U.S.-made devices and corresponding higher prices by producing them in a special color that will allow those that purchase the device to show off their nationalistic spirit. And showing off an Apple product in public is a reason why many people are willing to pay a premium for those products. Imagine being able to one-up those with ordinary Apple products? What would that be worth?
And, if the initial costs associated with Apple setting up a U.S. plant came with the potential to ding Apple’s bottom line, I would think they could just chalk up those costs to its marketing budget. Also, imagine the positive publicity Apple could garner by being able to promote U.S.-made products in advertisements, along with getting those in the media and Hollywood on its side.
The move could also be a way for new CEO Tim Cook to stamp his name on the company following the untimely death of Steve Jobs. I am aware that the Apple community is still in mourning over that event, but a move to produce products in the United States would seem to be a great way for the company to move forward.
I am not saying that Apple alone should be looking at such a venture as there are a number of U.S.-based device makers that could get in on this. But, with its balance sheet and consumer appeal, I think we could all agree that Apple is best positioned to actually make this a financial success.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–I can’t seem to get enough of reports showing the extreme in which people will go to not be without their mobile devices, even for a few minutes. The most recent is a study released by 11mark showing that three-fourths of Americans use their mobile phones in the bathroom. Use … not just carry.
The report adds that one-fourth of the 1,000 people surveyed “don’t’ go into the bathroom without their phone,” for fear of drowning and not being able to contact the Coast Guard, I can only guess.
In addition, the report found that 63% of those surveyed reported answering a call in the bathroom, 41% said they had initiated a call and 20% of men surveyed said they have participated in work-related calls from the bathroom.
11mark also managed to throw in a cute quote with the release, with the company’s Nicole Burdette quipping, “The writing is on the stall.” ZING!
Now, I realize that bathrooms are large areas filled with numerous facilities catering to a number of human needs. Heck, I have been told that some women bathrooms even have flowers and couches! But, come on people, aren’t we better than this? I would like to think that the echo I hear on some of my work-related phone calls is due to a crappy network, not because someone is in the crapper. ZING!
–Got a press release from a company called Amped Wireless and just for a second had a flashback to those awesome people at Amp’d Mobile. Remember Amp’d? They were that crazy MVNO headed by that crazy Peter Adderton, who we at RCR Wireless News were convinced zoomed around the world in either a private helicopter or with a jetpack.
Unfortunately, this flashback dimmed significantly when I realized that this Amped Wireless was involved with high-power Wi-Fi routers and not jetpacks. While awesome in the realm of Wi-Fi routers, this paled in comparison to a free-spending MVNO.
–Finally, it’s looking like the cut off between a smartphone and a tablet has been bumped to 5.4-inches, at least according to AT&T Mobility. The carrier is launching the Samsung Galaxy Note in a few weeks as a smartphone, which means price plans will follow those set for devices designed for both talking and surfing. However, if you want to jump up to something with an 8-inch screen like the Pantech Element, well then you are forking over money on a data-only tablet plan. Good to know where we stand on inches.
Speaking of AT&T Mobility, it was bound to happen that its decision to start promoting its HSPA+-based network as “4G” just months before it began promoting its LTE-based network as “4G” has now officially become a bad decision. And here is where that bad decision comes together. A comprehensive list of devices compatible with AT&T Mobility’s 4G networks, whether that is LTE-equipped that will work on both, but provide slower speeds when not on LTE, or HSPA+-only that cannot take advantage of LTE where available. Let consumer confusion reign!
I welcome your comments. Please send me an email at dmeyer@rcrwireless.com.
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