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.


Apple e-book price-fixing lawsuit reveals Cupertino's weakness

ipad3 ipad apple

Photo by pablofalv via Flickr Creative Commons

E-books cost more here.

Apple and a couple of holdout publishers have been hit by a Department of Justice lawsuit accusing them of colluding to fix e-book prices at a level higher than Amazon's flat $9.99 rate for the Kindle reader and other devices. The practice, which was allegedly timed to happen when the original iPad was released, allowed publishers to set the price at as much as $14.99, with Apple taking its customary 30 percent cut.

This is from the Wall Street Journal:

The government's lawsuit, filed in Manhattan federal court, described CEO-only meetings of publishers at which the alleged conspiracy was hashed out. The suit alleged that the publishers' chief executives met starting in September 2008 or earlier "in private dining rooms of upscale Manhattan restaurants" and "no legal counsel was present at any of these meetings."

The suit describes the shift from the traditional "wholesale" pricing model, under which retailers set the price of both electronic and physical books, to an "agency" model under which publishers set the price and retailers take a commission.


The iPad and long-form blogging

Apple Unveils Updated iPad In San Francisco

Kevork Djansezian/Getty Images

In the first product release following the death of Steve Jobs, Apple Inc. introduced the third version of the iPad.

Regular readers of the DeBord Report know that I'm a big fan of/occasionally exasperated by Fred Wilson, a prominent venture capitalist and avid blogger. Fred is a partner at Union Square Ventures in New York, with investments in companies like Foursquare, Disqus, and my new favorite search engine with a silly name, Duck Duck Go.

But Fred also blogs every single day without fail. Recently, he tackled the question of whether mobile devices can replace laptops for workers on the go. For some folks, they already have. I ran into our CEO in the elevator a few weeks back and somehow got to discussing my new briefcase. "This is my briefcase," he said, brandishing his iPad. 

It used to be inconceivable that you'd leave home without your laptop, especially if you had heavy content production on your agenda. I've heard tales of bloggers who can do their thing on tablets and even smartphones, but for the majority, I don't think the adoption of laptop alternatives has been that aggressive.


New iPad reveals Apple's customers-last sales strategy

Ipad Fanatic

Ashley Bailey/KPCC

Laverne Mirley of Monrovia was one of the first to get her hands on a new iPad in Pasadena. Her grandson held her a spot in line all night outside the Apple Store on Colorado Blvd.

Just in case you've spent the last 24 hours sleeping under an old iBook G4, the NEW Apple iPad hit Apple Stores today. One man reportedly waited in line for week, presumably to pick up the 4G-enabled 64GB tablet with the awesome retina display screen (price: $829).

Classic Apple, in the Greatest Company on Earth Era. The entry level iPad 2 (WiFi only) even went on sale for $399. But unless you're a completely blinkered Apple devotee, you have to ask yourself why Apple waited until now to launch what we're not supposed to call the iPad 2S or the iPad 3, because Apple wants us to henceforth refer to the iPad only as an iPad, better to avoid the generation-creep that plagues the iPhone, version 5 of which is expected to arrive this summer. 

The iPad, old and wizened as the device is since its appearance in 2010, traditionally sees a new model in March. This provides Apple with a nine-month period in which to sell the device, capping what has up to this point been a veritable frenzy with the holiday season. It then holds on for a year and squeezes every last sale is can out of the current generation of the device before pulling the trigger on the upgrade following holiday season number two.


It was a meh week for the stock market

Price Of Oil Rises Amid Stock Market Volatility

Mario Tama/Getty Images

Traders work in the oil options pit on the floor of the New York Mercantile Exchange on August 11, 2011 in New York City.

First the Dow hit 13,000. And almost immediately, as if it we suffering a financial bout of triskaidekaphobia, the market retreated. And then it spend the week basically going nowhere, despite the launch of a new Apple iPad, a solid February jobs report, and a sense that the worst might be over for Greece and that whole neverending European debt crisis.

What's are the markets going to need to hit 13,000 again — and climb higher? Well, it's hard to say. Better GDP growth would help. But the real secret sauce will have to come from the Federal Reserve, which could do another round of "quantitative easing" or employ some new form of monetary policy — perhaps "sterilized" easing, with the focus on preventing inflation from creeping back into the economy.

Is Wall Street trying to force the Fed's hand? Maybe. But for the moment, it looks as if the Fed isn't quite ready to have its hand forced.