A Boycott of Apple Products -- Not Likely

A number of media have accused Apple (NASDAQ: AAPL) of using Chinese companies whose laborers are treated harshly by their employers as they make iPads and iPhones. Some writers have called for boycott. While a boycott may be put into place, it will not change the demand for Apple’s products one bit. They are too popular and U.S. consumers do not care much about working conditions as far away as China.

Dan Lyons of The Daily Beast wrote about the Apple labor issue recently: “It’s barbaric. Ultimately the blame lies not with Apple and other electronics companies — but with us, the consumers. And ultimately we are the ones who must demand change.” That is not entirely true. If Apple is one of the villains, it has the capacity to change where it manufacturers its products. It has not, and probably will not. The gross margins on its products are too important to Wall St. And no one on Wall St. has voiced objections to Apple’s labor practices, at least not loudly or in public.

Apple’s labor issue has been exposed before. The treatment of employees at its large manufacturing partner, Foxconn, was uncovered in June 2010. As many as 10 workers committed suicide because of working conditions. Terry Gou, the founder of Foxconn, said he could not explain the tragedy. Or it may be that he did not want to. Apparently working conditions at his factories have been inhuman for some time.

The 2010 incidents and the widespread news attention they received did not stop record sales of the Apple iPhone last quarter, when the consumer electronics company sold 37 million iPhones. Apple also sold 15 million iPads in the period. Financial analysts who cover the company expect sales to continue at a phenomenal pace. Apple probably will launch an iPhone 5 and iPad 3 this year. Americans will wait for hours outside Apple stores and the products likely will be sold out in a day or two, if the past is any indication.

The press may care about the treatment of workers at factories where Apple’s products are made. Some part of the public may voice disapproval as well. But Apple’s products will continue to post record sales until consumers begin to tire of them, and not before.

Douglas A. McIntyre