As Apple s sales and profit have slowed, Chinese workers making its iPhones are feeling the pain, a new report says.China Labor Watch, a New York-based nonprofit group that advocates for workers rights in China, alleges in a report released this week that working conditions have worsened as Apple suppliers feel the effects of the company s declining fortunes — although Apple is still raking in billions of dollars from its iPhones, computers and other devices.In July, the company reported a third-quarter profit of $7.8 billion, compared with $10.7 billion in the same period a year ago.Revenue from the iPhone was down 23 percent.The report focuses on Pegatron, a supplier that employs tens of thousands of workers in mainland China and is the second-biggest contract electronics manufacturer in the world after Foxconn, according to Bloomberg Intelligence.To mitigate the impact, Pegatron has taken some covert measures to exploit workers.A news report this summer from Digitimes, a Taiwan newspaper, also said Apple suppliers were feeling pressure to reduce costs.All this is a headache for Apple, which for years has been under pressure to improve working conditions for the foreign workers who make its products and regularly conducts supplier audits.
A new report from watchdog group China Labor Watch CLW says Apple's overtime policies are routinely violated at one of the third-party factories where iPhones are made.The CLW report says many workers at Pegatron, which is based in China, are working more hours than Apple allows.Apple's policy says supply chain workers can't work more than 60 hours per week and should have at least one day per week off.CLW found several instances where workers clocked more than 80 hours of work per week and some cases where interns were able to get overtime pay even though they aren't allowed to.According to CLW, Pegatron workers feel forced to go for overtime because base wages are low and they need the overtime pay to get by.CLW says it interviewed approximately 100 Pegatron workers in 2015 and 2016 for the report and reviewed their pay stubs.In April, Bloomberg reporter Shai Oster visited Pegatron and wrote that the factory now institutes ID checks to make sure workers don't take too much overtime.CLW's report claims Oster's visit was carefully crafted and didn't allow access to areas where workers abused the overtime system.Apple and Pegatron did not immediately respond to requests for comment.You can read the full CLW report here.NOW WATCH: Apple retail boss Angela Ahrendts told us how Apple Stores are changingLoading video...
Credit: Austin Evans Image Source: Austin EvansAs has been the case in previous years, there s an increasing number of image and video leaks originating from Asia ahead of the new iPhone launch.We ve seen the iPhone 7 and iPhone 7 Plus in a variety of pictures and hands-on videos, although most of them were not functional devices.Instead, we only got to see dummy units.All of them are similar when it comes to overall design, and we re used to seeing iPhone 7 units pop up in all sorts of colors, including traditional ones and brand new options.Now, anew video goes behind the scenes and gives us an inside look at the facilities that make these iPhone 7 mockups.
A supervisor holds an Apple iPad as he checks an employee's badge during roll call at a Pegatron Corp. factory in Shanghai, China, on April 15, 2016.Sales of technology giant Apple in China, its second-largest geographic market, fell for the second consecutive quarter in the three months to June as iPhone demand remained sluggish worldwide.We face some challenges in Greater China, as the economic environment has slowed down since the beginning of the year, Apple chief executive Tim Cook said in a conference call with analysts Tuesday afternoon in the United States.Apple reported a 33 per cent drop in combined revenue from the mainland, Hong Kong and Taiwan to US$8.85 billion in its third fiscal quarter ended June 25, down from US$13.23 billion in the same period last year.That represented a wider year on year decline compared with the previous quarter.Apple s greater China revenue in its fiscal second quarter ended March 26 saw a 26 per cent decrease to US$12.49 billion.
Apple's suppliers, primarily in Taiwan can look forward to poorer results than earlier, reports Digitimes. Apple is said to have put pressure on suppliers to reduce their prices, including through bringing in more. The final assemblers Foxconn and Pegatron will have had competition from Wistron. Largan Precision, which manufactures camera modules to Apple, squeezed by Japanese Kantatsu. Meanwhile, the British Imagination Technologies, which develops chipsets sitting in Apple's A-processors, just announced its biggest loss ever. The company went back about 682 million crowns with a turnover of over 1.3 billion.
If the images match the iPhone 7 have a larger lens to the camera than the iPhone 6S and iPhone 7 Plus, dual lens just as previous rumors have suggested. The site also claims that the mass production of the new models started the last week of one supplier Pegatron. Whether the main supplier Foxconn also has started is not clear.
Over the weekend, quite a few new iPhone 7 reports emerged, including a set of wild claims – at least when compared to what we ve come to expect from this year s iPhones based on earlier rumors.Reports from Rock Fix, a smartphone repair shop in China, seem to indicate that the iPhone 7 might still feature a headphone jack.The shop posted images of alleged iPhone 7 components that show a 4.7-inch iPhone 7 s Lightning cable assembly attached to a headphone jack.Early iPhone 7 rumors said Apple might make three iPhones this year, including a 4.7-inch, a regular 5.5-inch Plus model, and a premium 5.5-inch Pro handset.4.7-inch iPhone 7 production is underwayThe 4.7-inch iPhone 7 is already in production at Pegatron, according to well-sourced @OnLeaks, though it s unclear exactly what the following tweet means.Pegatron will only make the 4.7-inch iPhone 7, with Foxconn tasked with building both 4.7-inch iPhone 7 models and 5.5-inch iPhone 7 Plus models.
Journalist and reputable leaker Steve Hemmerstoffer – better known on Twitter as @Onleaks – claims the final model manufacturing has slowly started at the Pegatron factory.Along with Foxconn, Pegatron is one of Apple s primary manufacturing partners.It s a Taiwanese company, although the lion s share of its employees are based in China.Apple is expected to unveil the iPhone 7 at its annual September product launch.Possible iPhone 7 design Image Credit: Martin Hajek, designer It s rumoured that the iPhone 7 will proffer little in the way of aesthetic changes when compared to the iPhone 6S.Supposed modifications include slightly reworked antenna banding and the removal of the 3.5mm headphone jack.
According to research around the Apple supply chain, an analyst from IHS Technology has concluded that the base models iPhone 7 and iPhone 7 Plus will ship with 32GB storage.He told John Gruber during an episode of The Talk Show podcast, "The belief is more and more as we use iCloud services for documents and our photos and videos and music, that perhaps the most price-conscious customers are able to live in an environment where they don't need gobs of local storage, because these services are lightening fast."This contradicts a previous reports from KGI analyst Ming-Chi Kuo, who predicted the 5.5inch iPhone 7 Plus would come with 3GB of RAM – enough to handle the hefty processing needs created by the larger devices' dual-camera set-up.PATENT: One of the technologies, dubbed ultrasonic imaging, is more reliable than Touch IDThe news comes as sources in Taiwan claim Apple has ordered a record number of handsets, between 72 and 78 million units, ready for the summer launch.The Cupertino company is believed to have a dramatic redesign of the iPhone in the pipeline, but it is unknown whether the technology will be ready for September.The news comes as Apple suppliers Foxconn and Pegatron have begun recruiting at least a month earlier than usual to deal with the increased complexity of the iPhone 7, the Economic Daily News has reported.
At one Foxconn factory in Kunshan, China, 60,000 workers have been replaced by robots, a Chinese official said — another data point that indicates that electronics production is increasingly being automated.Foxconn is best known as one of the primary assemblers for Apple products, but it also assembles gadgets for essentially every major electronics brand.According to the South China Morning Post, the factory has reduced its workforce from 110,000 to 50,000.Officials are hopeful that other "major companies" in the region will soon follow suit:"The Foxconn factory has reduced its employee strength from 110,000 to 50,000, thanks to the introduction of robots.It has tasted success in reduction of labour costs, said Kunshan government publicity department head Xu Yulian.In 2015, Foxconn chief Terry Gou predicted that Foxconn would use automated robots to complete 70 percent of its assembly line work.According to Apple's 2016 supply chain report, Apple does not do any final assembly at Foxconn plants in Kunshan, Jiangsu, although other Apple suppliers, Pegatron and Wistron, do assemble iPhones in the region.Recently, Foxconn posted a listing on its home page indicating that it's "hiring a large number of ordinary workers" for a salary of 3,800 renminbi, or $579 dollars per month.Signs point to the increase in hiring being related to iPhone 7 production.But it is unclear if Apple's factories will need as many workers to assemble the iPhone 7 as they employed to assemble the iPhone 6 and other previous iPhones.The Daily Mail recently reported on a Shanghai Pegatron plant which now reportedly has several abandoned dorms after it laid off migrant Chinese workers when they were no longer needed.NOW WATCH: A SpaceX rocket just did something not even its engineers thought was possibleLoading video...
They re made by humans, some of whom labor long hours for a meager monthly wage that would barely buy them an iPhone of their own.A feature published last month by Bloomberg s Shai Oster offers a rare peek inside one of Apple s most secretive production centers: the Pegatron factory on the outskirts of Shanghai, where some 50,000 Chinese workers transform raw silicon and plastic into the iPhone 6S.Face scanners and security gates greet workers at the door, where they must present an ID badge to gain entry.Pegatron does make available a few concessions to its workers humanity, such as snack bars and lounge areas outfitted with Wi-Fi.Qilai Shen/Bloomberg via Getty ImagesA supervisor at the Pegatron facility holds an iPad as he checks employees names during roll call.Qilai Shen/Bloomberg via Getty ImagesQilai Shen/Bloomberg via Getty ImagesEmployees look into facial recognition devices as they swipe their badges to enter the factory s assembly line area.
Bloomberg via Getty ImagesEmployees line up for roll call at a Pegatron Corp. factory in Shanghai, China, on Friday, April 15, 2016.This is the realm in which the world s most profitable smartphones are made, part of Apple Inc. s closely guarded supply chain.Workers at the Pegatron iPhone factory in China make an average of $650 to $850 a month, Bloomberg recently reported.Apple Apple s official Chinese website illustrates pricing options for two models of the iPhone 6S.Bloomberg s article quotes an advocacy group that alleges the Chinese factory s base pay is so low that many workers need to work overtime to make ends meet, though Pegatron and Apple have reportedly developed systems to discourage excessive work.And assembling the device requires workers who couldn t realistically buy the thing.
For investors in Taiwan s $841 billion stock market, Tim Cook matters more than Tsai Ing-wen.While the ascension of independence-leaning Tsai to the presidency on Friday has sparked concern relations with China will deteriorate, JPMorgan Asset Management and BlackRock Inc. say the bigger risk is the slowdown in the global smartphone business.Apple reported its first quarterly sales decline in 13 years, with Chief Executive Officer Cook acknowledging on April 26 that -- nine years after the iPhone s game-changing debut -- the market had stopped growing.Taiwan Semiconductor Manufacturing Co. and Hon Hai Precision Industry Co. both reported falling profit last quarter.Investor confidence in Taiwan s stock market reflects "export demand, and by far the dominant export demand factor is electronics and Apple in particular," said Howard Wang, Hong Kong-based head of greater China for JPMorgan Asset Management, which managed $1.7 trillion as of March 31.Pegatron Corp., which assembles iPhones, missed profit expectations and said April sales dived 16 percent.TSMC, one of the largest manufacturers of the application processors that are a mobile device s brains --- cut its 2016 smartphone demand forecast in April.In March, Chinese President Xi Jinping vowed to "resolutely contain Taiwan independence secessionist activities in any form," a warning to Tsai s incoming government.The Communist Party considers the island a province, even though it has been governed separately for more than 66 years, and reserves the right to use force to prevent it from moving toward formal independence."Taiwan having a government that s uninterested in unification with China is nothing new," Chou said, referring to two former presidents who leaned toward independence.She will focus on economic and social issues."