Designed by Apple in California, assembled where?
While hanging out in Seattle with @amcvitte, @jgerrish, @lizblankenship, and @eaderhold, we decided on a whim to go see a one-man play called The Agony and the Ecstasy of Steve Jobs, created and performed by storyteller–turned–investigative-journalist Mike Daisey. I had no idea what to expect, but “powerful” would not have been one of my guesses. The content of the show is already dead-on, so there’s not really anything I can add, so I’ll just expand on a few of his key points.
The show interleaves stories from Apple’s history (Woz calls the Vatican, Jobs asks Scully if he wants to make sugar water or change the world, etc.), tales of life inside the RDF, a brief (and questionable, but that’s beside the point) history of HCI, and stories from Daisey’s trip to China to find out how, and by whom, all of the products we lust after are made. Needless to say, as an HCI guy, Apple fanboy, and anti-corporatist (don’t think too hard about that juxtaposition), I liked it.
But thinking too hard is exactly what Daisey wants us to do. How can I justify simultaneously being an admirer, owner, user, and shareholder of Apple and its products while opposing the corporatist system that created an environment in which 13-year-old girls work 12–15-hour days assembling products just like the very one I’m typing this on?
When Jobs and the Apple team saw the Xerox Star machine at PARC, in all its WIMPy glory, they recognized that the metaphor of computing had shifted. Daisey uses this metaphor as a metaphor (metametaphor?), saying that “if you control the metaphor, you control the way people see the world.” Well, the metaphor of “Made in China”–as–black-box is a dangerous one, and one that has to change.
We think that factories in China are highly automated, using machines to do the precision work required to put together an iPhone. The scary part is that this has become true in the collective mind of the West, but only because we like to ignore the humanity of the millions of workers who assemble these products, by hand, in Chinese factories — 435,000 of whom work for FoxConn, Apple’s primary assembly contractor — pretending that they are, in fact, machines. It’s like I said about the mythology of Ford in my previous post: the assembly line is about mechanizing and menializing human labor. And in China, people are cheaper than machines. This metaphor is what has to shift.
Mike Daisey makes the point that it’s not about the money, it’s about the mindset. I think he’s right. Here’s why:
He says that the total labor cost of an iPhone is 80¢. The number I found is $6.54 [1] [2], so I’ll use that. The theoretical hourly wage of a FoxConn worker is $1.22 [3]. Going with that for the sake of argument, that means it takes
to produce an iPhone. Now consider a US factory where a worker makes $20/hour. Even if it takes the same number of man-hours to produce an iPhone, which it wouldn’t because a US factory would be automated (with machines), the labor cost of producing an iPhone would increase to
A large percentage increase, yes, but it’s a product that costs upwards of $600. (Remember, the one you bought was subsidized by the carrier.) With a total materials cost of $172.46 [2], that means Apple would only make $320.33 per unit as opposed to $421.00 per unit.
Last quarter, Apple made $6 billion in profits [4]. Its market cap is currently almost twice that of Google, and 50% higher than Microsoft’s or IBM’s. In fact, the only two larger publicly traded companies in the world are PetroChina and Exxon Mobil [5]. As a proud AAPL shareholder, I understand that the raison d'être of a corporation is to make money, and that it isn’t a humanitarian organization. But I don’t want blood on my keyboard — or in my portfolio. Domestic manufacturing can go a long way toward that goal. (It can also increase quality and reduce the financial and environmental costs of shipping products around the world. Oh, and it could help bolster the US economy (remember, I'm a Detroiter) and create some great press.)
As Mike Daisey says, the crime isn’t exporting our jobs, it’s exporting our jobs without exporting our values. [6]
- http://puntodigital.com/iphone-labor-cost-is-6-54-dollars/224237/ [↩]
- http://www.ipodobserver.com/ipo/article/iphone_3gs_manufacturing_cost_at_179_per_unit/ [↩] [↩]
- http://www.examiner.com/technology-in-national/ipad-iphone-manufacturer-foxconn-to-raise-employee-wages-again [↩]
- 13 weeks ending 2011-03-26 [↩]
- As of 2010-12-31 [↩]
- http://mynorthwest.com/?nid=577&a=28888 [↩]
In Pursuit of Consumerism
or, How I Got My iPhone
On January 9, 2009, Phil Schiller (Apple’s VP of Worldwide Marketing) revealed to New York Times technology columnist David Pogue that Apple’s product timeline was settling into an annual cycle that included updated iPhones in June. For nearly a year-and-a-half, the maximum available storage capacity had been stagnant at 16 GB. The day the original iPhone was introduced, I had decided that I would get one as soon as it hit 32 GB. Now there could be little doubt: a 32 GB iPhone would become available in June or July of 2009.
Fast forward to May. The Apple rumor mill is swirling with speculation about the imminent, but still unannounced, iPhone, and the general consensus is that it will be revealed at Apple's World Wide Developers Conference; the keynote speech — complete with product unveilings — is to be delivered June 8th.
The Great Switch
Since we first got mobile phones in the mid-to-late 1990s, my family had been with Verizon. Generally, we had been happy with the coverage, and had relatively few complaints, with two major exceptions: one is that they have a poor selection of phones, and those that they do support come laden with their proprietary firmware that cripples Bluetooth functionality forcing customers to pay ungodly sums of money to transfer photos (or other media) to and from their phones. The other is their lack of iPhone. (That Verizon turned down the iPhone when first approached by Apple is not surprising considering their history of wanting complete control over their phones' software.) The iPhone is, of course, only available in the United States on AT&T. Therefore, I would have to switch all five lines of my family's plan to AT&T.
The fine print
Over two years had passed since the last time any phones on our account had been upgraded. The exception was my sister, who had broken her phone in November of 2007. At that time, I told her to make sure that when she got a new phone, that she did not sign any contracts because I wanted to go month-to-month in anticipation of the iPhone. Evidently, the Verizon people who sold her a new phone were sneaky, because while she insists that she did not accept a two-year agreement, her phone was in fact under contract until November of 2009.
I would have none of it! A new iPhone was coming out in June, and I was going to get it in June!
That's when I started googling (I believe "proper verbs" can be lowercase) around for ways to finagle my way out of a Verizon contract without having to pay an Early Termination Fee (ETF). I found several options of somewhat dubious moral quality (having someone claim that you died, etc.) before I finally hit the jackpot, thanks to Ely Rosenstock.
The gist of it is that a Verizon contract stipulates that they have the right to change their prices during your contract, but that if any of those changes have a "material adverse effect" on you (i.e. it'll cost you more than it did before), you have the right to cancel your contract with no ETF, provided you do so within 60 days of being notified of the change. Luckily for me, about 55 days earlier there had been a note on the bill informing us that the Federal Universal Service Charge (FUSC) would be increasing by some nominal amount. But a material adverse effect is a material adverse effect no matter how small, so with just a few days left, I gave them a call.
Actually, before calling Verizon, I figured I'd give AT&T a quick call to find out how number porting would work, especially since I suspected it might not be a straight-forward cancelation because I would be exercising the ETF loophole. This is where I learned how a number port works:
To switch from Provider A to Provider B, you give Provider B your Provider A account information so Provider B can call Provider A and them to both port the number and close the account.
I thanked Patricia, my AT&T sales representative, for the information, and told her that I wasn't quite ready to make the switch yet because I had to work everything out with my family (remember, I'm switching four phones in addition to mine) and Verizon. Seeing a sale slip through her fingers, Patricia told me that it was my lucky day because if I switched that day, and that day only, she could waive the activation fee on all five lines (a $36 x 5 = $180 value). That sure got me moving, and she agreed to call me back at 22:00 Eastern to finish the sale.
Following Ely's detailed instructions, I called up Verizon. I had a really great rep. in the cancellation department named Phyllis. (Seriously, really great.) She put me on hold for maybe 10 minutes while she consulted with her supervisor, and when she came back she said that as long as the number port was complete and the account closed by June 1, I would not have to pay the ETF.
Patricia called me back right on time. I went through the process of opening an account and ordering five free phones. The only things I paid for were two car chargers for my parents and two-day shipping, which I bought to make sure I'd be able to activate them easily by the 1st.
Activation
A big box from AT&T arrived at my dad's office on Thursday the 28th. My parents came to Ann Arbor to have dinner with me that evening, so I took my new, but temporary, Sony Ericsson W350a (which I got because it has iSync support), and tried to activate it right away. I first tried the online activation system, but for reasons that remain a mystery to me, I was unable to activate successfully. Once again, this time from Skype in anticipation of my number being cut off during the call, I called customer service. A helpful — but somewhat less knowledgeable — woman took care of porting my phone number and activating my new phone. Not all was well in the netherworld that lies betwixt Verizon and AT&T, however.
My number had made the transition to AT&T, but the other four lines on the account were stuck in purgatory: calling any of those numbers resulted in a recorded message from Verizon stating that the number was no longer active. This meant that AT&T had instructed Verizon to close the account, which they are supposed to do only once all lines had been activated on AT&T's network. Consequently, each of the other phones had to be activated on AT&T in order to remain an active line. Since my parents were not planning to activate that night, the process had to be accelerated somewhat. I know not whether it was the fault of the rep. who took care of my activation or if it was a systemic problem. I suspect the former.
My mom called me in a panic, saying that the AT&T customer service call center was closed for the night, and would not reopen until the next morning. This was, in fact, a serious issue because my parents' land line is a VoIP line through Vonage, which relies on both power from DTE Energy and data from Brighthouse, making failure a not-too-unlikely prospect. Fortunately, Vonage offers automatic failover to another line, in this case my mom's mobile. Because of her aging parents, it is necessary that she be reachable twenty-four hours a day, so a night without an active mobile phone was not an option.
After calling several numbers and listening to several recorded messages, I finally discovered the AT&T after-hours emergency service number which, incredibly, does not have an automated call screening system; a human answered my call right away. He was able to connect me with the automated, over-the-phone activation system. My mom's phone was all set within ten minutes. The next day I called the automated activation system myself and took care of the other three phones. Finally, we were settled in to our new wireless provider. All that was left was to wait for the new iPhone to be released — or so I thought….
This opportunity may self-destruct in 30 days
I'd first heard rumblings that I might not qualify for full upgrade pricing if the new iPhone was not released within my 30 day "buyer's remorse" period when I went to see the (quite good) Disney-Pixar movie Up. A friend of a friend told me that he knew people who, when the 3G came out, were unable to get it at the cheapest (i.e. most highly subsidized) price because they were too far into their AT&T contracts, but not far enough in to warrant an upgrade. This concerned me because, though rumors were plentiful, Apple had yet to make any official announcements, and I was taking a bigger gamble than I thought.
I called Patricia, my AT&T sales rep, to double-check that as long as I re-up my two-year contract, I will be able to get the new iPhone, whenever it comes out, at the fully subsidized price. She assured me that it would be no problem. I am not sure she was right, but fortunately, it didn’t matter.
The Announcement
On June 8, Phil Schiller gave the keynote address at WWDC 2009. I won't give a full review of the address, but suffice it to say that with about fifteen minutes to go of the two-hour talk and no word of new iPhone hardware, I was getting very nervous. Finally, with ten minutes remaining, Phil announced — in classic Steve form, but without his inimitable[1] style — that there would, indeed, be a 32 GB iPhone, and that it would be available in eleven days, on June 19. Worry and anticipation could now be replaced by excitement and anticipation.
I thought it prudent to spend those ten days making sure everything was in order; it's a good thing I did. As soon as the availablility date was annouced, I tweeted, "I will be getting an iPhone on June 19", and no corporation was going to make a liar out of me.
Some eligibility is more equal than others
When I got home from work that day (if I waited even that long), I checked my upgrade eligibility at both Apple’s and AT&T’s websites. Both said that I would have to pay the full, unsubsidized price of $699, which I was definitely not about to do.
The following morning, I called AT&T customer service on my way to work. The representative I spoke with was very friendly, but very uninformed (and quite possibly less intelligent). I explained that I was in my 30-day buyer’s remorse period, and would be returning my current (i.e. stopgap) phone for the iPhone the day it was released. I explained that I was hoping to pre-order the phone, and wanted her to change my eligibility status in the computer system so I could do so. She told me, correctly, I later learned, that she could not do that. She went on to say, however, that Apple handled all matters of eligibility with regard to the iPhone. This made no sense to me, but I took her word for it.
The next day, I stopped at the Apple store on my way home from work. I explained to one of the guys working the floor that I had spoken with AT&T and was told that it was Apple who handled iPhone eligibility. He said that my instinct was right, and that Apple has absolutely nothing to do with upgrade eligibility in AT&T’s system. This made much more sense to me. I called AT&T back, hoping that this time I would win the game of call center roulette.
I spoke to a guy who told me that as long as I had my temporary phone, I would not be eligible for an upgrade. In other words, what I would have to do is return my phone, which would change my eligibility, and buy an iPhone. Since I wanted to pre-order, I would have to be without a phone for a week. If I wanted a phone during the time between when I returned my temporary phone and had an iPhone in my hands, I would have to borrow a GSM phone from a friend.
That day, AT&T revealed that all new pre-orders would not be filled until the first or second week of July. This limited my options further, because it meant I had to pre-order from Apple.
The next day, I went to the Ann Arbor AT&T store, where Rodger was able to confirm what I had been told on the phone. He had the additional suggestion of buying an off-the-shelf pre-paid phone from Best Buy or Wal-Mart for not much more than $20 and dropping in my existing SIM card. At that point, I remembered (I don’t know why it escaped me until then) that my sister, who was out of the country for several months, had a phone sitting in a box at my parents’ house (35 miles away in Farmington Hills) that I could easily borrow for a week.
On Sunday the 14th, I went home. With only six days remaining until I would have an iPhone, I immediately swapped the SIMs, cleared what had been my phone for the last two-and-a-half weeks, synced my sister’s phone with my computer so I would have my contacts, and went to return my phone to the local AT&T store.
The saleswoman thoughtfully wanted to make sure that I had upgrade eligibility before walking out of the store. Several times she tried performing a procedure that I came to know was called reversing an upgrade, but to no avail. Unsure why it didn’t work, she added a note to the account, but I left with two phones, and without eligibility.
The clock was ticking.
Back in Ann Arbor on Monday, I decided to try again. This time, it was Kyle who helped me. After much back-and-forth between several employees, assistant managers, and the manager, it was finally determined that reversing an upgrade is exactly that: reversing an upgrade. New service is not considered an upgrade; therefore, there was no upgrade to reverse, and there was no way I could get iPhone eligibility before the fast-approaching Friday release date. I went ahead and returned my phone anyway, just to get half of the exchange process out of the way before what I was anticipating would be a busy Friday morning at whatever store I ended up.
Now I had one, and only one, option for getting an iPhone on June 19th: wait in line at an AT&T corporate store. No pre-ordering. No Apple store.
On Thursday evening I was back in Farmington Hills for a rehearsal, so I decided to spend the night there. My dad and I would wake up early to get in line, then, hopefully, both get iPhones. On the way home from rehearsal, I made a quick stop at the AT&T store just to double-check that everything was squared away. It was. I also made sure that pre-sales and regular sales worked the way I hoped. Again, they did.
The store would have two separate stocks of iPhones: one for those who pre-ordered, the other for anyone who had not. The doors would be opening at 7:00 am. Customers who had pre-ordered would be allowed in first. Not until 10:00 am (or no one in line had pre-ordered, whichever came first) would other customers be served. That meant that the only way I could absolutely guarantee that I would have a phone was by being the very first non–pre-orderer in line.
The line, if you could call it that
The store is situated in the heart of suburbia in a corner building shared with Old Navy and Potbelly. Determined — perhaps overly so — to be the very first person in line, I arrived at 2:30 am, just as the cleaning crew was leaving Potbelly. I backed into a parking spot and settled in for the wait with a book, some lentil soup, and a jar of water. I slid over to the passenger seat to read, while my dad was resting at home; it would be up to me to let him know when he should come out.
I couldn’t have been there for more than an hour when two Farmington Hills police cars pulled up. Evidently, someone thought it suspicious that someone would pull into a parking lot in the middle of the night, back into a space, and sit in the car as if they were waiting for something. I politely explained the situation, that I was first in line for the new iPhone. They doubtlessly thought I was odd (an accurate assessment, I admit), but they let me be. They probably had a good chuckle about it as they were driving away. At least it’s nice to know the neighbors are vigilant.
Much to my surprise, suburbia does not sleep at night. It was particularly interesting to watch the near-constant flow of trucks, most of which were carrying food, lumber in and out of parking lots and loading docks. It was a small glimpse into one of the many hidden components of our society that make it tick.
Around 4:30, the thunderstorms started to roll in. I was expecting them, but the lightning was impressive indeed. Still the only one in the parking lot, it was becoming apparent that no one else would be braving the rain, even from the relative comfort of a car. Shortly after 5:00, I went home to use the bathroom and to see if my dad wanted to come back for the final stretch.
I pulled back into my parking space shortly after 5:30. This time, there was a single other car in the parking lot, which I quickly realized belonged to the store manager. In half-hour intervals, more employees would pull in, each bearing some sort of refreshment: bagels, coffee, ice, juice for the line that they, too, were anticipating. Each time, I was hoping that someone would join me. I watched as the first two employees took down the 3G poster and replaced it with that for the 3GS. I watched as the cleaning lady (who drives a late-model Cadillac) vacuumed and dusted the store. I watched as the manager replaced the floor model 3G iPhones with the 3GS iPhones. Still, I was the only one in line.
It was not until 6:45, fifteen minutes before the store opened, that a family of five pulled up in their SUV. Finally, someone else in line!
They, like most people who showed up right at seven, had placed pre-orders. Only the guy directly behind me hadn’t pre-ordered. Luckily, few people braved the weather, so it didn’t take more than twenty minutes before I was allowed in. While Chelsea was helping me through the transaction, my dad came in to join me. (I had called him.)
The store employees were just as surprised as I was at the meager turnout. The previous year, they said, the line had been wrapped around the corner. The bad weather must have kept people at home.
Finally, I could relax. I had my iPhone. Mission accomplished.
[1] I first heard this word from Professor Mick McQuaid, in describing the desirability of his classes as a result of his teaching style. He was right.