Apple is currently auditing the Foxconn factories in China which manufacture many of its products like the iPhone, following a spate of bad publicity over working conditions there. As demand for higher wages and increased safety regulations at the factories goes up, so will the price of Apple's products, some industry analysts are saying.
Last month, the Fair Labor Association began auditing two Foxconn sites in Shenzhen, China, which was publicized in an ABC Nightline video exclusive. Hong Kong-based market analyst Alberto Moel told the Wall Street Journal that the results of the FLA's audit, expected sometime this month, will likely lead to improved working conditions at the factory and ultimately raise production costs for Apple. This cost, however, will likely be placed upon the consumer in the form of increased retail prices for Apple products.
In the end, it's a 'win-win' for everybody except the end-consumer, who will probably end up paying more, Moel told the Journal.
Moel told the Journal that retail prices for the iPhone, in particular, could eventually rise by $10 or more per unit, reflecting the cost of improved working conditions. He added that global consumers of Apple products had been getting a free ride off low wages and poor safety conditions in overseas factories.
The iPhone 4S, Apple's latest model, typically costs about $199 with a two-year contract, and can run up to $849 separately, so the price increase projected by Moel seems marginal.
Taipei-based analyst Peter Liao told the Journal that Apple has been able to raise its prices in the past without damaging its market share.
Apple has brand premium, but not other smartphone makers, Liao told the Journal.
Liao told the Journal he wasn't sure how much Apple would need to increase prices to maintain its profit margins, but that new technology could lead to an overall reduction in cost of production.
In the end, as workers overseas demand better wages and working conditions, consumers of Apple products will have to get used to paying a little more for their iPhones.