Second presidential debate: Obama wins the iPhone question

Scenes from the September riot at a Foxconn plant near Beijing

KeallHauled

Chris Keall

A slice of the second presidential debate:

CANDY CROWLEY [Moderator]: iPad, the Macs, the iPhones, they are all manufactured in China.

One of the major reasons is labor is so much cheaper here. How do you convince a great American company to bring that manufacturing back here?

ROMNEY: The answer is very straightforward. We can compete with anyone in the world as long as the playing field is level. China's been cheating over the years. One by holding down the value of their currency.

Number two, by stealing our intellectual property; our designs, our patents, our technology. There's even an Apple store in China that's a counterfeit Apple store, selling counterfeit goods.

They hack into our computers. We will have to have people play on a fair basis, that's number one.

Number two, we have to make America the most attractive place for entrepreneurs, for people who want to expand their business.
 

OBAMA: Candy, there are some jobs that are not going to come back. Because they are low wage, low skill jobs.

Boom.

As Romney full knows, there’s no need to lure the entrepreneurial Apple to the US.

It’s still in California, as always. It's now the world’s most valuable company, and one of its most profitable. It employs 50,000 in the US* – many in management, engineering, design and marketing roles at the sharp end of its battle with rivals like Google, Microsoft and Samsung.

By contrast, Chinese company Foxconn, which assembles most of Apple’s products, is by definition a low-profit company.

If it tries to make more than a single-digit margin, Apple will simply take its business elsewhere (and Flextronics and others are quite cable of handling orders that run into the tens of millions). 

None of this is really up for debate.

Outside the carnival atmosphere of the campaign, neither candidate will make any move to induce or coerce Apple to move its manufacturing to the US.

Still, it’s interesting there’s still a popular perception that China, through the grim, low-profit Foxconn, has grabbed a big slice of the Apple success story.

Even the Wall Street Journal's All Things D blog - which otherwise makes coherent points on high-end jobs, focusing on invention, 200,000 josb created in app development and the fact Americans won't/can't work for Foxconn wages - can't resist emphasising that Samsung makes some chips for Apple in Texas. At a gut level, manufacturing is king.

* I know, not all of them are happy or in high-end jobs. But can you imagine a Chinese company allowing a staffer to protest during the middle of a product launch? Stand strong for those bubblers, Cory.

ckeall@nbr.co.nz


POSTSCRIPT: Respondents to two snap polls gave the debate to Obama - CNN by 46% to 39%; CBS by 37% to 30%.

Obama was praised for being more assertive, but at times it was almost comically physical as each candidate made school attempts to invade the other's space. 

The tone was set at the start, when each candidate sought to trump a dominant-hand handshake by simultaneously palming the other candidate's shoulder, Bill Clinton style. Neither thought to go for a head pat. The race remains tight.

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9 Comments & Questions

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Did Romney say "Number two" twice?

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Romney is slipping down the same slope as Goff, focusing too much on attacking Obama and the current state of affairs and not enough on providing solutions and new ideas.

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If Romney gets in we're all screwed. The guy is a dangerous muppet. Win Obama! Win.

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Chinese thinks that Apple is taking advantages of them. Pay them peanuts (in this case, you have correctly pointed out that Foxconn, a Taiwanese owned company, earns single-digits margins), and sell the iPhones, iPads, iPods, MACs to Chinese for three times the amount it was manufactured. Many Chinese are Apple-maniacs, and have already contributed millions to this American company.
Apple nor Foxconn have done NOTHING to change the working enviornment in China, and have been reported recently that they have hired 14 year olds to work in the factory.
There will always be another country, China or otherwise, who will continue to provide cheap labour.

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Romney needs to drill in hard on the Belgazi scandal which surely could stop the Obama campaign stone dead.
liberte

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Bad luck - Romney did drill in hard on the Benghazi question and Obama royally screwed him. Good call

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Hard to take any body named candy seriously...

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Yup, Candy is a stripper's name.

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