1. iPhone. The people who potentially lose

are several benefits to Apple outsourcing the production of iPhones. Apple
saves money by outsourcing. First, Apple saves money on labor. The cost of
labor is much lower in China than in the United States. Chinese subcontractors have
a speedy response when Apple wants changes in design on short notice or on
production levels. This is important when manufacturing new models of the
iPhone. China’s factories are within close proximity, making it easier to get
parts to the assembly line. Even though there are several benefits, there are potential
costs and risks to Apple as well. Apple’s subcontractor, Foxconn, has drawn
attention for its poor working conditions such as low wages, long working
hours, and unsafe factory conditions. Also, Apple may face criticism from the
general public about how their subcontractors treat the factory workers that
make their iPhones. It could potentially hurt Apple’s public relations if the subcontractors’
workers’ situation gets worse.


addition to Apple, consumers also benefit from Apple decision to outsource. Similar
with many products that are manufactured in China, the iPhone would be much
more expensive to buy if it were manufactured in the United States. The input
costs would rise very high if it were manufactured in the U.S. And so would the
retail price of the iPhone. The people who potentially lose are the employees
in the Foxconn’s factories that have to work in poor and unsafe factory conditions.
Also, there could be workers in the U.S. who might have wanted to work those
manufacturing jobs that were outsourced, although there probably are not many
who would be willing to work in the same poor conditions that allow for low cost

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potential ethical problems associated with outsourcing assembly jobs to Foxconn
in China are the poor treatment of assembly workers and poor working
conditions. Foxconn’s factory workers with in unsafe factory conditions for
long hours and low pay. There are poor safety standards that can lead to
hazardous situations. Apple might deal with these potential ethical problems by
requiring regulation on factory labor. Apple could work with Foxconn to improve
factory working conditions including fair wages and improved safety conditions.
Apple executives do have the influence to take action to address the ethical
problems. Apple’s executives are in a spot to help affect change in the company.
For example, executives at Nike made efforts to address the issue of factory
workers that manufacture their products. When a company commits to ethical
treatment of its employees, it could lead to a good response from investors and


the kind of out-sourcing undertaken by Apple is a good thing for the American
economy. Apple saves on the cost of labor by outsourcing. This keeps costs of
the iPhone down, and Apple does not need to raise prices drastically, and earns
more profits due to the demand. This drives consumer spending which helps the overall
economy. Apple can use the cost savings and put them into research and
development on new products. Apple is famous for being an innovative company,
and outsourcing is a part of that. Furthermore, Apple can use the savings to
hire employees in the U.S. in high-paying fields such as engineering. Apple has
254,000 jobs in the United States so it is creating jobs in the U.S. as well. Without
outsourcing, products would become more expensive for companies to make, and
would become more expensive for consumers to purchase. Many other companies
that have the same system of outsourcing production of their products have
similar outcomes regarding labor cost savings, research and development,
innovation, and financial performance.  


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