Some iFans may have called out of work last week in an effort to snag a new iPhone 6 and 6 Plus, which went on sale last Friday. Sales of these devices topped 10 million last weekend–higher than the first weekend sales of the iPhone 5 last year.
The line at the 5th Avenue Apple Store in NYC on September 19, 2014. (Credit: Kathy Harget)
There is no question that demand for the new iPhones is strong, but some analysts have pointed out that these high sales figures are not an indicator of demand, but supply. With the iPhone 6 and 6 Plus selling out at locations around the world, its clear Apple is limited by how much it can supply, and how quickly.
Apple shareholders may be excited about the frenzy generated by the release of the iPhone 6, but workers experience this frenzy differently. A spike in demand for these phones puts greater pressure on Apple’s supplier factories and the estimated 1.5 million workers who work in them, either making parts or assembling the phones.
The Wall Street Journal reported that Foxconn, one of Apple’s final assembly partners, has been operating roughly 100 production lines around the clock in Zhengzhou. “We have been churning out 140,000 iPhone 6 Plus and 400,000 iPhone 6 every day, the highest daily output ever, but the volume is still not enough to meet the preorders,” said a person familiar with the matter.
“The challenge is to manufacture two complicated new iPhones on a large scale at the same time because Foxconn is the sole assembler of the 5.5-inch iPhone 6 Plus [and assembles a majority of the 4.7 inch iPhone 6.]”
While Apple boasts profit margins as high as 69%, as was the case with the iPhone 5s, Foxconn’s profit margin is closer to 1.5%, according to Bloomberg. Apple expects high volume, high quality, and high Corporate Social Responsibility (CSR) standards of its suppliers, however, not in equal measure. When these expectations come into direct conflict, the CSR policies most likely lose out. This is especially common during times of peak demand, when workers are found to be working excessive overtime, well beyond legal limits. This can also take the form of mandatory overtime, as we found at Catcher, another Apple supplier.
Consumers who didn’t snag a phone last weekend can expect to wait several weeks or months for a new iPhone. We encourage Apple to allow its suppliers the time they need to meet this demand, without compromising working conditions. With worldwide demand well over 10 million units, its clear that consumers of these devices won’t be disappearing anytime soon.
As iPhone 6 workers labor around the clock, you can support them by pushing Apple to take action to improve conditions for workers. You can also share “9 Reasons Not to Rush your Next Smartphone Upgrade” with your friends.