Explaining Southern California's economy

Building iPads is 'tedious and boring'

 

Rob Schmitz, the Man in Shanghai for Marketplace, became the second reporter ever to be allowed inside the massive Foxconn factory where workers from across China come to build Apple iPads for $2 and hour. (Marketplace is part of the same American Public Media family as KPCC, by the way.)

Building the world's most popular tablet is "tedious and boring," says Schmitz. And from the video footage, it looks it. Foxconn is running an old-fashioned assembly line, barely automated at all, where human hands do the repetitive work that's creating a new middle class (of sorts — $14 a day only gets you so far) in China.

Worth noting that this is ground zero for Apple's substantial 30-percent profit margins. First, Apple has outsourced the assembly work to the cheapest possible place where it can still be right in the middle in the Asian consumer electronics supply chain. Second, Apple has compelled Foxconn's parent company to accept much lower relative margins, in return for the work.

In a nutshell, that's why Apple is trading at over $600 a share today.

Follow Matthew DeBord and the DeBord Report on Twitter.

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