Just my 2 cents.
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Originally Posted by shabta /img/forum/go_quote.gif
So what about china?
China has many well documented cases of Child Labor and Human rights abuse. Use google, you’ll find lots of reports. One of the greatest areas is in the assembly of electronic equipment such as PCB boards etc. Another problem is flagrant violations of the 40 hour/week law. Most factories push their workers to 70-80 hours per week. Many workers have very little leverage. Many factories only pay salary once a year so if you want to quit or make trouble you can lose many months of pay because you may have worked 8 or nine months with three to go before payday. Even if a factory wants to obey the law they can’t. If they go to 40 hours/week they essentially double their salary costs relative to the competition and will soon go out of business.
These kinds of conditions are standard at many of the famous western companies doing manufacturing in china. Google around and you will see documented cases of human rights abuse at Apple factories.
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Objective view base on facts.
I trust my eye but not always the second hand info. Second hand info could be truth, but also it could be bended facts, incomplete/pre-filtered info, then I could be misled to form inaccurate conclusion.
A big tree could have thousands leaves on it. If I put my eye close enough, my eye can only see one leaf. For some people, if this leaf is good, he/she says good, if the leaf is bad, he/she forms the view the whole tree is bad. Whatever he/she saw is truth for one leaf but that truth does not represent the overall picture for a big tree.
For this case, the key is whether Child Labor reported by news media represents the whole business practice in china. Whether 1%, 10%,50% or 99%? Base on my first hand info, most of the formal companies do not do this. There are thousands of western companies setup the business branch in China, why only very few companies such as Apply were reported by news? Why not IBM, HP, CISCO, Motorola, Mouser China(if you are DIYer and use Mouser frequently) etc?
Also for your view "Most factories push their workers to 70-80 hours per week. Many workers have very little leverage. Many factories only pay salary once a year so if you want to quit or make trouble you can lose many months of pay because you may have worked 8 or nine months with three to go before payday.", this is not true as a big picture for all business practices in China if you really have first hand info. My view is formed base on my first hand experiences from visiting the cities spread in about 80% of provinces in China because of business trips.
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Originally Posted by shabta /img/forum/go_quote.gif
So if many of the hi-tech products coming out of China are made by exhausted and/or very inexperienced (young) workers how come some products are so much higher quality than others? For example, ipods are historically better quality are better than Telcast. That has to do with process control and engineering expertise. I won’t bore you with a lecture on Total Quality Management or Design for Test (especially in circuit design), but that is where the dividing line likely is.
So Apple with its incredible engineering and process management expertise and huge economies of scale can deliver higher quality products than a less experienced Chinese company.
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FYI. The factories who actually manufacture the IPOD do not owned by Apple. Basically they are Chinese companies who got the OEM orders from Apple and just manufacture/assemble IPOD per Apple's Spec/Design.
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Originally Posted by shabta /img/forum/go_quote.gif
As a high tech executive in one of the world’s biggest software companies I established a large scale engineering effort in china…. Many of us in Silicon Valley who did this didn’t do it because salaries were low, although that helped. We did it because it was getting harder and harder to find competent engineers in the US and Europe. There are lots of great engineers in those countries but the high-tech industry grew so fast and the war for talent became so intense, we needed to diversify the talent pool. Over time, just as gold now costs about the same where ever you go, so too will the cost doing engineering work be the same wherever you go.
The cost is not that far apart even today. Salaries have skyrocketed, and although the engineers I hired were amazingly bright and worked hard, they were inexperienced. That inexperience costs money.
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For Hi-Tech business, this is very true. For some companies in Telecom industry as example, in US, cost per headcount per year is roughly about 130K USD. In China and India, it is about 60K USD. We can see offshoring can save money but the saving is not 70K USD per headcount per year. From business standpoint, we have to think about execution and efficiency. Assume the team we hired in China/India is very stable and they are really best in best people(because of huge population there), we have to give them time to gain experience and master the skill set needed for the job which means relatively lowered execution and efficiency.
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Originally Posted by shabta /img/forum/go_quote.gif
So it is a legitimate question how come little dot amps are so inexpensive. And it is easy to see that the cost of parts which don’t differ much from place to place make it a near certainty that LD is cutting important corners. No matter how nice a sales person the company is run by. Although by the time your introductory budget priced tube amp blows you will be on to something else... I hope.
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Comparing to regular consumer electronic, for the headphone amp business, any way the part cost is relatively low in the overall cost structure.
Besides the part cost, what else? Labor cost for marketing, ordering parts(SCN), soldering, testing, customer service, R&D and system engineering etc. If the labor cost is significantly lower, the overall cost is very low.