The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

What Does an iPhone 5 Cost?

Oct 1, 2012

Apple’s new smartphone iPhone 5 is manufactured by Foxconn. According to electronics industry analysts, the components of this device cost around $180.

The retail price of this phone is around $650. Thus, Apple makes a huge profit on each sale.

Apple pays Foxconn $12.50 as a labor cost for every iPhone it makes, which represents just 2%, a very tiny fraction of the iPhone's sale price. But Foxconn also profits since the production volumes are huge.

Foxconn workers in China get a mere $1.78 per hour, work long hours with no overtime pay and are cramped into dorm rooms with 8 to 10 people in a single room, living under military like conditions. That is why and how Apple and Foxconn prosper.

In human terms, this miserable wage level and horrible work conditions are the actual costs of a miracle electronic device produced under capitalist conditions.