Apple's triumphant quarter was followed by a New York Times article painting a truly awful picture of health and safety violations in the factories that build products for Apple and for other electronics companies, such as
Dell (DELL). The article raised lots of questions. How much greater are the abuses that may arise making products for Apple than for Dell? We know the iPhone is a high-profit device, but what we know is compiled from estimates of the chips and screens used in them. We don't really know what Apple's labor cost is relative to competitors.
In some senses, Apple is just the face of a much broader phenomenon, blending our rapacious desire for cheap manufactured goods, the rapid rise of emerging markets and the still brutal nature of much of the workplace. (You need look no further than coal mines and offshore oil drilling for similar revelations.)
On Thursday, Cook reportedly issued a memorandum telling staff the company will not turn a blind eye to abuses at suppliers. I think the Times piece did what it should by raising awareness and, let's hope, putting Apple and its competitors on the spot. I think Apple will make steady progress in addressing the matter, and I don't expect the scandal will be a drag on its stock.
)
