Apple’s decision to back wide-ranging pay and labour reforms at the Chinese factories of Foxconn, its biggest contract supplier, will clearly raise costs at both companies.
But the Apple empire will not see a serious dent in its profitability, as its high-tech competitors will have to follow suit. And it’s a price worth paying to keep on the right side of consumers who don’t like the idea of buying iPhones made by slaves – and of the Chinese authorities who have backed pay rises for workers to help spread the benefits of economic growth.
Investors believe the electronics industry can take this in its stride. Despite the dramatic headlines, shares in Hon Hai, Foxconn’s parent, fell just 1.3 per cent in Taipei on Friday, following a 1.3 per cent drop in Apple on Thursday.