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Labour might be priced in CNY, but most of the expensive bits in the BOM are from non-Chinese firms like Qualcomm, Samsung, and others and would be in USD denom
by mcrae 8y ago
Labour might be priced in CNY, but most of the expensive bits in the BOM are from non-Chinese firms like Qualcomm, Samsung, and others and would be in USD denominated contracts most likely.
- addicted 8y agoApple almost certainly doesn’t hire the Chinese laborers directly. They do so indirectly through the likes of Foxconn. And their Foxconn contracts are almost certainly dollar denominated. If anyone benefits from the strengthening dollar, it’s Foxconn, who likely gets the same dollars per iPhone, but those dollars get them more Yuan than they did before. They still pay their employees the same number of Yuan, which means they have more left over for themselves. As a result, Apple’s iPhone costs remain the same in dollars, so they need to sell it at the same dollar price to maintain their margins, but that means the iPhone is more expensive for people in China buying in Yuan, or people in India buying in Rupees, or people in Europe buying in Euros, therefore reducing sales.