The Reach - Podcasting and other Portable Media Strategies

Monday, Macworld UK uncovered a story of Apple’s iPod manufacturing partner in China - originally published by Mail On Sunday and the blogosphere went nuts. At issue was living conditions, monthly pay, and hours worked. Apple was quiet initiallly and now has responded.

Considering that we just returned from a business trip to SE Asia, where a portion was spent in Shen Zhen, China, it’s necessary that I read these articles with an open mind. I wrote about that portion of the trip here. I should read with an open mind, consider what I personally saw in the factories which we buy from, and then act accordingly.

While the factories we were in weren’t the cleanest places I’d ever seen, I didn’t see any evidence of poor treatment of the workers or conditions that were unreasonable. When we arrived, the factory workers were taking a lunch break, and since ostensibly we were there to see the working factory, it was decided that we would go and eat lunch ourselves. Lest you think cynically of us that maybe we were naive, we did see the factory workers leaving the building en masse as we drove up.

We asked questions about working conditions and hours, but didn’t ask specific questions about monthly wages. We generally were satisfied with the responses and attitudes of the people we spent time with.

Now, my response to those that are up in arms about Apple - let me ask you this: In the U.S., we demand ever increasing profits so that share prices and company value will rise, therefore lining our pocketbooks or nests or whatever you want to call them. In order to accelerate that (and keep the buying public consuming at prices they are willing to pay), U.S. companies have been driven offshore to find the lowest possible cost of goods sold. Now, when they do, we have heart attacks over where the companies choose to have their products manufactured. Is that completely fair?

Now, let me be clear. I am FOR HUMAN RIGHTS. People should have the right to work, they should have the right and choice to work in decent conditions and make a decent wage (btw - those wages mentioned in the articles are somewhat reasonable for that area of the world, depending on what neighorhood you live in - just like here in the U.S.). Workers shouldn’t be required to work long, unhealthy hours. I didn’t see anything conclusive in the articles to state that these workers were being abused. If, in fact, they are being forced to work 15 hours days, particularly without reasonable compensation and choice as to work those hours or not, then I agree - that is abusive and Apple has the power to change that. One way is to threaten to end its relationship with Foxconn or completely sever it, if the relationship breaches Apple’s own code of conduct, mentioned here (same link as the response above, but included here for convenience), referring to the EICC.

It is a global economy and we do have to ask the question “What is the cost of low cost?”. And, we do have to ask if we’re closing a blind eye as consumers in order to fatten our bank accounts and get new toys at a lower cost. Hmmm.

Pronounced Shenshen, this is a city that 10 years ago was little more than a fishing village, on the other side of the China border from Hong Kong. Now, it is a crowded city of 10 million. Bigger than Hong Kong.

The city is sprawling - from the suburbs to downtown is at least an hour in traffic. And that’s in the middle of the day! It took us a full day to visit two factories.

We met our trading partner in Hong Kong about 9am and took the train from Festival Walk (a very Western mall in Kowloon) up to the border of China. After going through customs, we then traveled by another train up to the end of the subway in the suburbs of Shen Zhen where a company car and driver from the MP3 player factory picked us up for the meeting and tour of the factory. Given the train, customs, another train, and ride in the car, we showed up at the factory at 12 noon, when most of the factory workers were at lunch.

The sales manager of the company suggested we go to lunch as well, so back into the car, for a 2 block, 40 minute trip to a true Chinese restaurant. (They asked if we wanted Chinese food - my wife and I looked at each other as if - what else would we be eating here?! - so we said of course!). I’m not sure if any anglos had ever been to this restaurant - great food, tremendous experience. Our Chinese hosts were very gracious and tolerant of our ignorance of Chinese customs and original food, but we learned quickly and they seemed surprised that Laura and I were eating with chopsticks.

The factory itself was a great assembly process to watch, with good quality control - they can churn out 300,000 units per month, in terms of capacity. They have exciting new products, of which one of them is a 7 inch video display, battery powered, using an SD Card for the source content. This will play any digital audio/video file - MP3, MPEG4, WMA, WMV, AVI, etc. Should be fun to see the applications. it’s certainly not pocket sized, but easily portable - much smaller and lighter than a portable DVD player.

The second factory we sent to was near downtown, in a much older section of town. Dark back alleyways and up a dark stairwell and then you find an entire custom circuit board manufacturing company with Yamaha automatic circuit board pressing equipment. That day, they were making Lenovo webcams. We buy our FM transmitters (similar to the iTrip) from this manufacturer. It’s run by a 30-yr old capitalist who apologized for the appearance of his factory - but, with a grin, he said “We’re profitable” (in only Mandarin to our trading partner). We were impressed - not with the looks, but how determined he was as an entrepreneur to grab hold of opportunities.

We got back to our room in Hong Kong about 7:30pm and then went to dinner to think through our day and what had happened. Our conversation centered around the phenomenal growth of Shen Zhen, the traffic, the new relationships that we had established and the thankfulness for this opportunity to have our eyes opened further to how flat the world really is.