Apple's competition is going to have a tough year in 2016

In 2015 Apple grabbed a 94 percent share of the world's global smartphone profits, sold the only profitable tablets and smartwatch, increased its Mac unit sales,, launched a successful NFC payment platform, took a huge slice of the music streaming market and introduced a new platform for the living room. How can it possibly beat that performance in 2016?

That's the premise set out by clickbait legend Jay Yarow of Business Insider, who penned a compendium of worries of potential scenarios of doom for the world's largest and most successful tech company, bravely entitled "Apple is going to have a tough year."

Yarow raised some scary sounding ideas about Apple before dashing them himself with facts, then started over with some less sensational, rather basic complaints about how he thinks Apple could be doing better in various ways, such as retroactively introducing products years before they were developed, or alternatively holding up the release of new products until there are no possible ways one could ask for improvement.

While the article itself says nothing worthy of note, it's useful to consider the white space around it: the real facts that Yarow tiptoed around and apparently went out of his way to fail to acknowledge in order to generate some content to satisfy the Apple-centric SEO quotas at BI.

It's a lengthy article that never once contemplates how the world is changing around Apple. The reality is that it will be much easier for Apple sell iPhones, iPads, Apple Watch and Macs in 2016 given that its competitors are now weaker than they were in 2015.

2015: The year of Weak Apple Competitors

If you've forgotten already, 2015 was the year that Apple's primary mobile device competitor imploded and the figurehead of a legacy software company dabbling in hardware rather arrogantly claimed that it was the

="http://appleinsider.com/articles/15/10/23/microsoft-represents-only-serious-competition-for-apple-hardware-ballmer-says">most competent PC hardware maker left (which, astonishingly, was actually partially true).

Virtually all of the established PC makers seemed to be evaluating how to get out of the business, even as Apple's premium-class Mac sales gained significant new ground. Including tablets with PCs, Apple now sells the most computers and the most expensive computers (and nearly all of the expensive computers), an apparent contradiction of the "common sense" understanding of price elasticity of demand and the premium-eroding nature of commodity products.

Apple is essentially the Professor stranded on Gilligan's Island, except that rather than being the intelligent problem solver for a bunch of goofy half-wits stuck on an island, Apple is competing against them in the global market for electronics.

The idea that Apple will be struggling to pay the rent this year as it copes with an inferiority complex grounded in the overshadowing success of last year's Apple is not just a surrealist joke. It's also what passes for journalism and analysis these days on the web. A lot of ink has already been spilled about the deep hole Apple keeps digging for itself as its past successes make for a Law of Large Numbers / Difficult Compare moving forward. It should be considered whether Apple even really faces any effective competition

The plight of Apple's competitors doesn't really come up much, but when grieved by concerns about Apple's precarious predicament on the biggest and fastest growing pile of cash in the industry, it should be considered whether Apple even really faces any effective competition.

Real world competition, that is, not the representative products of "competitors" that make up a tiny irrelevant shred of the world's total market share, which really exist only to give enthusiast magazines something to compare against Apple.

Take for example Google Nexus. While industry writers like to talk about how Google has "80 percent" share with Android, the actual units of Google-branded devices that compete with Apple are quite negligible (0.1 percent, according to IDC), despite the huge share of media attention provided to it. The number of people buying Nexus phones is less than even Windows Phone, and you'd be hard pressed to find any reasonable person who actually believes that Microsoft materially competes with Apple in the smartphone market.

Remember in 2012 and 2013 when iPad was supposed to be under grave threat from Nexus 7 at its breakthrough price of $199? Everyone watched in anticipation to see how Apple would react to cheap 7 inch tablets. But in reality, it didn't even bother to respond. Apple continued selling its own tablet products at prices more than twice as high as Google's bargain tab.

Despite that, iPads massively outsold Nexus 7, not to mention the rest of the entire production of Asus (the firm that was building Google's vanity tablet). It's clear Apple didn't consider Google's Nexus line to be a competitor that it needed to address in its own pricing. But the end result makes it pretty clear that Nexus never offered any real competition.

In fact, Apple's peak iPad sales, when the company reached above 20 million iPads in holiday quarters, were sold at record profits directly in the face of Nexus 7, a product that barely shows up in global tablet sales. Two years later, Apple is selling fewer iPads, but it's not because of tablet competitors. Google isn't even trying to sell cheap tablets anymore, and its tablet sales have never reached up into commercial significance.

Effective competition is not posed by a product that offers a dramatic price advantage yet fails to sell in relevant quantities. Last year, Apple's competition posed such little significance that the company dramatically expanded its sales even while raising the iPhone's Average Selling Price.

Hardware prices in the tech industry are supposed to go down. They are for everyone else. Also down are margins and overall profits. Apple's competitors are limping into 2016 even as Apple rolls into the new year on on a overboard made out of money.

Pity the iPhone maker

As noted in a year-end report by Philip Elmer-DeWitt of Fortune, "even bullish sell-side Apple analysts" including Daniel Ives of FBR; Mark Moskowitz of Barclays; Katy Huberty of Morgan Stanley; Amit Daryanani of RBC; Aaron Rakers of Stifle and Timothy Arcuri of Cowen have been voicing Peak Apple concerns rooted in their sell-side equity research.

Yarow states, "Publicly traded technology companies like Apple are measured by their ability to grow earnings and revenue," but then ignores both and begins talking about unit sales, even though none of the analysts worrying about flat unit sales are saying anything about Apple's earnings and revenue being at risk.

Remember that many of these same analysts, including Morgan Stanley's Katy Huberty (who Yarow calls a "megabull on Apple"), were warning that Steve Jobs' Apple of 2008 faced a worrisome global macroeconomic climate that would kill sales of the premium products that the company was offering and drive impoverished recession victims into the arms of commodity product makers.

Back then, analysts were indeed worrying about revenue and earnings, not just unit sales. That talk helped crash the demand for Apple's stock, slashing its going rate among investors in half by the end of that year. But it wasn't true.

Despite a global recession stoked by a $4 trillion war and a catastrophic credit crunch incited by a dismantling of banking regulation, despite economic malaise contributing to unemployment and buyers with less cash on hand, Apple kept on selling more Macs and iPhones, and continued to earn record profits. Jay Yarow states, "Publicly traded technology companies like Apple are measured by their ability to grow earnings and revenue," but then ignores both and begins talking about unit sales

The analysts were wrong. Apple's stock price corrected itself by more than doubling in 2009, then nearly doubling again in 2010. In fact, Apple's stock has never ended a year with negative performance since 2008, except for this year, when analysts began saying the same kinds of things they were saying in 2008.

Currently, Apple's stock has hit a new recent low, but it's about 780 percent higher than it was back in 2008, when analysts who didn't really grasp Apple's business were describing bleak troubles that seemed "common sense" plausible to many investors at the time.

It's pretty clear those same analysts don't really understand today's Apple any better, in part because the Apple of today is much larger, has expanded into many new and differentiated regions and has a much more complex supply chain than it had in 2008, back when iPhones in the U.S.A. were only available via AT&T and the product wasn't even officially sold in China.

This year, Apple is selling an enhanced "s" version of its iPhone 6, the duo of larger models that last year began as unproven new products in the market and appeared—according to clickbait content generators—to face significant competition from Samsung, by far the largest Android phone maker.

Over the past year, iPhone 6 proved itself it be both very popular among early adopters and extremely satisfying to those who bought it, in stark contrast to Samsung, which witnessed a massive collapse in demand for its comparable, premium-range Galaxy S6 and Note 5 models.

Samsung is facing not just flat growth for the coming year, but has already experienced an end to its smartphone growth last year! Not only is Samsung Apple's largest hardware competitor, but it's the only significant firm that offers any real competitive threat to iPhones at all. And it's collapsing. It's actively warning its employees (and again warned investors this week, just as it did last year) that things are not going well.

Apple didn't warn analysts and investors that it was facing an end to iPhone growth. Tim Cook did the opposite during the September earnings call, explaining the credible reasons why the growth Apple was seeing with iPhone 6/6s would continue into the future.

Cook is neither a member of the media nor an executive for Samsung, so under FTC regulations he can't materially lie about the financial situation of his company and expect to get away with it. At the same time, prior to its earnings call Apple is in a quiet period, so hedge fund managers know they can say pretty much anything.

In early 2009, just after Apple's stock had last been ransacked by irresponsible financial reporting of CNBC, talk show personality Jon Stewart grilled Jim Cramer, the frantic host of its "Mad Money" entertainment show, for his act of being "doe-eyed innocent" while celebrating the admittedly illegal shenanigans of hedge fund managers, calling Cramer's act "disingenuous at best and criminal at worst."

Rampantly false reporting is back with a vengeance. Prior to Apple's last earnings call, Cook earlier interrupted the non-stop speculation then swirling about Apple's supposed problems in China. Rather than appreciating the appearance of reliable information based on facts, the same people who had been spreading lies about Apple in China turned on Cook and suggested that it was improper for him to tell the truth during lie-season, as if stock manipulators should be able to deceive the market without being challenged.

Since then, clickbait pundits have focused on the "difficult compare" Apple will have in matching its incredible success last year. However, myopically focusing on Apple's previous performance fails to consider that this year, its largest competitor and the only other very high-volume maker of premium smartphones is bruised and battered, after failing to show any competent capacity to actually challenge iPhone 6 across all of 2015 despite multiple new product launches.

Last year, Samsung released twice as many flagships as it formerly has; it also unveils major new offerings at least twice as often as Apple's annual refreshes. None of these really offered any resistance to iPhone 6.

Over the previous three years, Samsung essentially paved the way for larger smartphones, but then flopped badly in response to Apple moving into the big-phone product category that Samsung could previously point to as a real and obvious differentiation.

What's the next big thing? While Samsung already sells higher-resolution fablets than Apple's existing iPhones, those pixel counts are not an obvious differentiator in the market; based on what people were buying in 2015, iOS was considered more valuable than ultra high density screen resolutions. That wasn't as clear cut in 2014, when iOS was indeed losing some valuable sales on the high-end to Android phones with larger screens.

That indicates that in 2016, pixel counts are not going to make a significant difference. Samsung also can't keep releasing larger and larger phones, because the value of a large display quickly starts to become a size, weight and clumsy interface liability after 5.5 inches. Samsung (and other iOS rivals) will have to invent something completely new to even have a chance of winning back losses to iOS on the valuable high end, but nobody in Android-land has proven to be very good at inventing compelling new differentiating premium features.

Android's success has primarily come from how similar to iOS it can present itself as being, and Samsung's success has almost exclusively been based on closely replicating the appearance, behavior and features of iPhones as closely as it can. Unique inventions of Android and unique features conceived by Samsung have almost entirely been flops: LED trackballs, multiple hardware buttons, curved screens, 3D displays, hand waving gestures, eyeball tracking and facial recognition to name just a few.

On the other hand, Android has historically introduced earlier support for emerging technologies such as LTE, NFC and 4K video before Apple. That's changing. Not only is Apple developing its own leading A-series chips, but it's also now in a position where it can simply watch struggling Android vendors try to innovate and harvest their best ideas.

Now that the shoe is on the other foot, Apple has a series of clear advantages that Android makers can't afford to add to their downmarket portfolios, because Android hardware is increasingly differentiated only by price, and being cheap also means you don't have money to invest in new technology.

Only a few Android flagships offer something like Touch ID, 64-bit SoCs, or support Google or Samsung's version of Apple Pay, and none yet have shipped a 3D Touch equivalent. Few have anything comparable to Apple's ecosystem features like Continuity, HomeKit, HealthKit and CarPlay. In fact, Google is so slow at releasing new Android updates that less than a third of its Google Play users can plug into the company's version of CarPlay.

Apple is entering 2016 with an enhanced iPhone 6s lineup and a more affordable set of iPhone 6 models to offer, while Samsung has no success to build upon, and has instead clearly lost major market share and suffered a direct hit of its premium customer base. The Android licenses that have benefitted from Samsung's collapse are flooding the market with even cheaper models, making it even harder for Samsung to respond effectively to Apple's expansion on the high end.

Apple of 2016 is not really competing against Apple 2015; it's competing against Samsung 2016, and that competitor is looking awfully weak. Nobody else in Android land is looking significantly better, while Blackberry and Windows phones have also started into a battle with relevance for another year, further stripped of their weapons and armor. Even their most strident fans are giving up. That's also the case on Android.

Given that only 30 percent of the iPhone user base upgraded to iPhone 6 last year, the rave reviews of that product and new expanded features on the high end 6s—and price options on the lower end 6—should have no problem extending the 6/6s upgrade cycle throughout 2016.

It may well be that Apple is seeing less demand for its latest iPhone 6s models, due to the fact that there is less to differentiate the 6 and 6s than there was between the 5s and the restyled 5c two years ago. However, this year Apple's "last year" model has a $100 premium Plus variant, and is offered in 16 or 64GB versions, making it more likely that even buyers who opt for a cheaper iPhone 6 will still maintain Apple's industry-leading Average Selling Prices.

And while Samsung and other Android licensees have struggled to sell premium models of any kind, even Apple's thriftiest customers will be delivering an ASP far higher than the ASP seen among Android phones.

Further, the likelihood of Apple revamping a new 4 inch "iPhone 6c" model this spring also looks capable of switching a generation of iPhone 5/5c/5s users who want a single handed-phone to a new, faster model with a better camera and support for Apple Pay. Apple of 2016 is not really competing against Apple 2015; it's competing against Samsung 2016, and that competitor is looking awfully weak

However, the biggest smartphone issue in Apple's favor going into 2016 is the extended malaise hanging over Android, Windows, Tizen and Blackberry, all of which have languished while their users have observed Apple making substantial technical leaps and rapidly distributing free updates that keep iPhone users secure from mass exploits, protected from incessant adware tracking, refreshed with new technical capabilities and (for most users) enhanced as increasingly fast and power-efficient devices.

While Apple is working on refinements and new features for iOS 10, Google is busy working to remove copyright infringing code from the next Android N, busywork that does nothing for Android users but delay other planned new features and fixes, with the potential side effect of introducing new bugs.

Between iOS upgraders and switchers from other platforms, Apple currently has no visible end to its smartphone expansion. Android is indeed a massively large platform on a global scale. But that's also opportunity for Apple. One only needs to look at the last several years of increasing Mac sales, fed largely from Windows defectors in an era of flat Windows growth.

Android is currently a larger pool to draw from than Windows was, and while much of that pool is shallow in terms of premium phone opportunity, it also represents a massive number of basic users who will eventually switch to a premium phone, the same way that basic "feature phone" users upgraded to smartphones over the last eight years.

Five years ago, Microsoft incorrectly bet that a partnership and then acquisition of Nokia could parlay that firm's still significant basic phone market share into a demand for Windows phones. That didn't happen.

Apple didn't have to spend billions of dollars to develop training wheels that taught basic phone users how much better smartphones were. Google did all the work and got its licensees to pay billions every year to advertise this. The beneficiary has clearly been the company that now earns 94 percent of the industry's profits.

Until Apple actually begins to see flat growth in iPhones, let's instead look at its competitors, all of which are performing so extremely poorly that their own users are essentially being herded into Apple's iOS corral, without Apple needing to even do much work on its end. Once that gravy train slows down, then we can talk about the decisions Apple will be forced to make to maintain growth, such as the price slashing and billion dollar ad campaigns that Samsung and Microsoft have infamously tried, without much success.

But right now, can we stop the handwringing faux-pity over Apple's dire problems of making too much money while selling too many phones with the dire result of being challenged to improve upon that performance? Because that's not a problem, it's every CEO's fantasy.

Following upon this first segment, a second looks specifically at Apple's business outside of iPhones.

Forget about the competitors. How's the suicide rate at the Apple factory lately?

That report about the upcoming ABC report is not what it seems. . . nor were the comments about the suicides or photos shown in that report taken from the ABC documentary but rather from you linked to were not what they claimed. Those claimed comments and photos were not from "ABC" but were from video that had been cobbled together by China Labor Watch, a New York based labor organization that turned out to be a fraud. CLW faked interviews, mis-translated what was actually said in the interviews, and used videos from factories that were not even FoxConn's where poor conditions were shown to push their agenda. Those comments were taken from discredited Mike Daisey "The Agony and Ecstasy of Steve Jobs." Look at the poor quality of the photos and the obvious fish-eye lens. . . from a hidden camera.

How is the suicide rate at the Apple factory lately? Like it has always been, damn close to ZERO.

When the suicides that occurred in 2009-2010 at FoxConn happened at the Shenzhen complex ZERO Apple products were being assembled any where at that complex. In fact it has been well established that the workers who committed suicide were assembling Microsoft Xboxes, HP Computers, Nokia cell phones, and Sony Playstations. The nearest Apple assembly line was located at another FoxConn complex 150 miles away.

The ONLY suicide involving any associated with Apple's products was in mid 2009. It was totally unconnected to the other suicides. It involved a mid-level FoxConn engineer and a missing iPhone 4 manufacturing sample prototype which had been in his charge. He was questioned first by FoxConn security, then by Chinese police about what happened to it. . . apparently roughly, as only the Chinese can do. He was then released to go home to his twelfth floor apartment in the city, pending further questioning. He messaged his girlfriend that he was sorry about something, not to tell his parents, and that he was "so ashamed" and that "I am in trouble." He then went to the roof and jumped off. That is the ONLY suicide that had any connection at all to do with Apple, Iceman.

Between the time the spate of suicides started and ended, FoxConn had between 400,000 and 800,000 employees as the grew rapidly. The largest number of suicides was eight in a six month period out of a total of 18 in 18 months. Counting all of them, the suicide rate was less than 3.1 down to around 1 in 100,000 per year, and at the plant where the largest number occurred less than 5 per 100,000. The US suicide rate among young people of the same age cohorts is 11 per 100,000. The overall Chinese rate of suicide in those age cohorts is 22.32 per 100,000. It is far higher among rural youth on farms, where many of the FoxConn workers had come from. One psychologist who had been brought in to study the spate of suicides seriously asked why FoxConn wasn't being praised for maintaining a facility where conditions were so good that it LOWERED the suicide rate among young people because they were so contented to work there!

Those outside psychologists doing the investigation on why the spate of suicides occurred, found they did NOT have much if anything to do with working conditions at FoxConn, but rather had to do with individual situations. One had to do with a love triangle, three with homesickness, others with mental illness, and several had to do with financial considerations having to do with the family benefit paid to the families of suicides by Terry Gou, the CEO of FoxConn. It seems they decided their families would be better off with them dead than alive and working. They even told their friends and families of their decisions.

Once FoxConn's CEO stopped his policy of paying suicide surviving families between $25,000 and $50,000 bereavement and condolence compensation, the suicides stopped. The suicide rate at all of FoxConn's facilities which now employ upwards of 1.5 million people, is now approximately 0.55 per 100,000. In 2013, there were ZERO suicides among all of FoxConn's workers either at work, or at home.

The suicide rate at American Ivy League Universities is FAR higher than FoxConns at the peak of the suicides in 2010.

Your estimate of the pay rate of workers on the Apple assembly lines is totally off the mark. Workers at FoxConn's assembly lines working on Apple products are paid up to $3.70 an hour equivalent. That 1.12 pound ($1.87 in 2012, keep in mind the cost of living in China is about 1/8th what it is in the US) per hour equivalent rate is what China watch claims and is the Chinese minimum wage for factory workers. . . is not what FoxConn even pays its regular assembly line workers much less what it pays Apple assembly lines workers which are paid between two to four times the wages paid to workers who work on assembling things for Microsoft, HP, Sony, Lenovo, and the 500 or so other contracts companies FoxConn does work for. Apple's contract specifies their workers are to be paid better.

Why do you think there are thousands of workers who queue up for every single job opening on Apple's assembly line at FoxConn? It is because of the better pay and conditions on Apple's lines.

Here is a report on FoxConn in general written by a disinterested third party who works across from one of their plants:

Foxconn: The Fire That Wasn't
BY Brad Hall - 03/15/12 - 09:41 AM EDT
NEW YORK (TheStreet) -- Over the past month, media reports have made Foxconn (FXCNY.PK:OTC) the icon of Chinese labor suffering. Headlines from The Telegraph (March 7) read "iPhone Workers Beg Apple for Better Working Conditions." Daily Tech wrote, "Employees at Apple's Hellish Foxconn Factory Feel Life is 'Meaningless'." Sounds like a scary place.
My office building shares a property line with Foxconn's largest plant in Shenzhen. Every night I see Foxconn employees at restaurants. They seem happy, but after reading many articles, I've come to view them with pity. Yet, friends who work as consultants to Foxconn tell me that working conditions are quite good.
There are thousands of factories in the Pearl River Valley and a there is free flow of employees between the factories. I wondered how could a company be so abusive and yet so successful? It seemed to defy logic.
I began to wonder, "What does Foxconn look like through the eyes of its employees?"
Foxconn is a Taiwanese-owned company that produces about 40% of the world's consumer electronic products and is Apple's (AAPL_) largest supplier. Its largest factory in Shenzhen employs approximately 300,000 young adults. It's beyond huge. As a personal disclosure, I am neither related to, nor friends with any FoxConn employee and I do not own Foxconn stock. I do own AAPL.
Most FoxConn employees come from the countryside where their hardworking families have farmed the same land for many generations. They dutifully send home part of their paycheck each month.
From 1988 until 2009, four Foxconn employees attempted suicide on-site (0.18 per year). In 2010, that number increased almost one hundred times to eighteen. In 2011, it fell again to four. What happened in 2010?
In 2010, embarrassed by bad publicity, the company offered condolence pay packages equivalent to 10 years' salary to families of the deceased. This was widely reported in China and company officials say the incentive served as a call for depressed individuals to join Foxconn and leave life with honor. Foxconn CEO, Terry Gou read this letter to shareholders: "...now I'm going to jump off Foxconn, really leaving now, but you don't have to be sad, because Foxconn will pay a bit of money, this is all your son can repay you now."
In the second half of 2010, Foxconn publically stopped the condolence payments. In 2011, the suicide rate dropped by almost 80%. It is important to note that even at its peak, Foxconn's suicide rate was 1.5 per 100,000 vs. 3.1 per 100,000 in China -- half the suicide rate of society at large.
Maybe the suicides were not about labor conditions.
Last week, my colleague Jiangying, a 23-year-old Chinese woman, and I randomly interviewed 22 Foxconn employees to see their world through their eyes. We assiduously adhered to behavioral science protocols for unbiased questioning, but you can judge for yourself. Here are our questions and here's what we heard.
"Tell us about your day at work. What do you like and not like about your job?"
Most told us that their job was "OK." No one brought up the topic that work was too demanding. So we asked about their work demands. Almost all said they were reasonable. Surprisingly, one third said their workload was "light or "easy," but none of these worked on the production line. We asked them if their friends were satisfied with their jobs. All but two either said "yes" or "I don't know."
We asked if their work area was clean and safe. All said that it was.
Because we did not hear unsolicited complaints about their work, we asked a leading question, "Do your friends often complain about their work?" A strong majority said that they know people who complain about their work. However, the nature and intensity of the complaints did not seem unusual from what one might expect in any work place.
"Tell us about your pay."
Only a few brought up pay without this question. One said, "The pay is too low." We asked, "Is the pay lower than other factories?" She said, "The pay is the same, but other factories give more overtime. I am losing 1,000 RMB per month!" She went on to tell us that she stays because there is so much career opportunity at Foxconn when compared to a typical Shenzhen factory.
In our first day of interviews, we asked about the infamous 12-hour (7 a.m. to 7 p.m.) days, but no one knew about these work hours. We returned on the second day determined to find the answer. We asked equipment supply people who serve many production lines. They insisted that no one works 12-hour days. We even stopped a female janitor. She didn't know either.
Ironically, the biggest dissatisfaction by far, was lack of overtime. Most of those we interviewed work the 8:00 a.m. to 5:30 p.m. shift with a 90-minute lunch break. With one exception, all said they wanted more overtime -- especially Saturday work. Saturday pays double time. Saturday work is competitive and, at best, employees are limited to one Saturday per month. Additionally, some told us that the maximum allowable overtime for their group is 16 hours per month while others said that their maximum is 36 overtime hours per month.
"What do you do after work and on the weekends?"
The vast majority of Foxconn employees are between 18 and 25 years old. Three hundred thousand, mostly single, young adults who did not go to college and leave work at 5:30 p.m. Their interests are the same as any young adult. They play pool, soccer, surf the internet, eat with friends and date. But, like new college students, most were homesick and said they want to go home.
"Tell us about your manager."
Only two said they did not like their manager. A small group had no opinion, but the majority smiled and when we asked this question. They said they liked their manager.
After all the interviews, we wondered, "Where's the fire?"
Last month ABC News aired an "exclusive inside look" of Foxconn. It was 15 minutes of sensational build-up about sweatshops - smoke, with no fire at all.
The ABC crew was given permission by Apple to talk to anyone about anything. Their gotcha moment was a chat with one young lady edited down to one leading question, "If there was one thing you could change, what would it be?" The young lady said the dorms are too crowded and the trees block the sunlight. That's their best shot?
Last week, the Fair Labor Association began a formal Apple-sponsored investigation of Foxconn. After his first visit to Foxconn, the gray pony-tailed president of the FLA, Auret van Heerden said, "The facilities are first-class; the physical conditions are way, way above average of the norm." Being "way, way" above average is not what one might expect from the "hellish Foxconn factory."
In today's highly connected, blog-filled world, what is the probability that, in a random sample of 22 Internet-savvy employees, no one has either personally experienced or heard of the oft repeated stories of abuse?
These are two fundamentally different representations of reality. Maybe the fault lies with media members who want to believe in Chinese labor abuse, maybe it's that sensationalism sells or maybe it's simply lazy writers forming opinions from others' opinions. The root cause is unclear.
But one thing is certain -- the media is not telling you the truth.
At the time of publication, the author was long AAPL, although positions may change at any time.
Hall is managing director of Human Capital Systems
(www.humancapitalsystems.com), a firm that designs systems for improving workforce performance. He is also an instructor in Duke Corporate Education's teaching network and author of The New Human Capital Strategy. Hall was formerly a senior vice president at ABN AMRO Bank in Amsterdam and IBM Asia-Pacific's executive in charge of executive leadership and organization effectiveness. During his tenure, IBM was twice ranked No. 1 in the world in Hewitt/Chief Executive magazine's "Top Company for Leaders." Hall completed his Ph.D in industrial-organizational psychology at Tulane University, with a dissertation on people management practices of Japanese corporations.

Multiple other studies have come to the same conclusion as Brad Hall, that there is no facts behind the claims of slave labor or poor working conditions at FoxConn. All of the reports of low pay, long hours, and horrendous working conditions on Apple assembly lines come from a single source, China Labor Watch, which has no presence in China at all and is a money generating New York operation that has been caught multiple times in presenting fraudulent claims. China Labor Watch uses Apple as its preferred target all though there are far better targets for their wrath than Apple and FoxConn such as the companies the video that do have horrendous conditions but then turn around and claim ARE FoxConn, for the same reason others do: Apple in a headline generates far more clicks and revenue than some unknown Chinese manufacturer, or even telling the truth that those suicides were workers on Microsoft, Sony, Nokia, and HP assembly lines. It was much easier to put Apple in the headline and say later, several paragraphs down what lines the workers were assembling, if they ever bother to do so.

Incidentally, I would be wiling to bet better than 75% if the electronics in your house, including your TV, radios, Stereo system, cell phone, and your computer, were made by FoxConn or Pegatron, for a lower wage than Apple pays. Only Apple specifies in its contracts that its assemblers be paid better than the prevailing factory assembler wages. The rest just take what comes with the package from the contractor. Here's a list of FoxConn's fifty or so largest customers:

Acer Inc. (Taiwan)
Alcatel (France)
Amazon (United States)
Apple Inc. (United States)
Archos (France)
ASRock (Taiwan)
Asus (Taiwan)
Barnes & Noble (United States)
BenQ (South Korea)
Blackberry (Canada)
Cisco (United States)
Dell Inc.(United States)
EVGA Corporation (United States)
Fujitsu (Japan)
GE Thomson
Google (United States)
Griffin Technologies (United States)
Grundig Mobile (Germany)
Hewlett-Packard (United States)
HTC (Taiwan)
Huawei (China)
Intelï»¿ (United States)
IBM (United States)
Kyocera Communications (Japan)
Lenovo (China)
Lenovo/Motorola Mobility (China)
LG Lucky GoldStar (South Korea)
Microsoft (United States)
Microsoft MSI (Taiwan)
Motorola Communications (United States)
NCR (United States)
NEC Casio Communication (Japan)
Netgear (United States)
Nintendo (Japan)
Nokia Oyj (Finland)
PackardBell (Netherlands)
Panasonic (Japan)
Philips (Netherlands)
Pioneer Electronics (Japan)
Samsung (South Korea)
Sanyo (Japan)
Sharp (Japan)
Siemens (Germany)
Sony (Japan)
TCL Communication Technology (China)
Telefunken (Germany)
Thomson (France)
Toshiba (Japan)
Vizio (United States)
Xiaomi (China)
Zoostorm (New Zealand)
ZTE (China)

How'd I do? Is your phone or computer on there?

I suggest you do some research other than FUD sources before you post MYTHOLOGY.

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