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Tag: Smartphone Manufacturers

  • Samsung Child Labor Accusations Come to Light

    As Samsung has grown into a major competitive force in the smartphone market, the company has faced greater scrutiny of their products. Now, Samsung is also facing greater scrutiny on their manufacturing operations, something Apple has had to deal with for years now.

    China Labor Watch, a New York-based organization that defends the human rights of Chinese workers, this week published an investigative report on an HEG Electronics factory located in Huizhou, China. HEG is a Samsung supplier for components found in Samsung products. The report claims that several children were found working at the HEG factory.

    Members of China Labor Watch worked jobs at the HEG factory during June and July of this year. Their report claims that seven different children under the age of 16 were found working in the department where the members were stationed. China Labor Watch estimates that 50 to 100 children could be working at the factory, out of 2,000 total workers. It also claims that these children are making only 70% of the wages normal employees at the factory receive.

    According to the China Labor Watch report, younger student workers make up a majority of the employees at the factory during summer and winter periods. It is claimed that underage workers are smuggled in using false identification on the pretext of being student workers. China Labor Watch claims that underage workers, when discovered, were moved to rented dormitories away from the factory, but not fired.

    To Samsung’s credit, the company has immediately responded to the accusations. It released a statement today promising to send a team of inspectors to the factory by August 9. The full statement from The Verge:

    “Samsung Electronics has conducted two separate on-site inspections on HEG’s working conditions this year but found no irregularities on those occasions.

    A team of inspectors consisting of Samsung personnel from Korea headquarters will be dispatched to Huizhou, China on August 9, and it will immediately launch an investigation and take appropriate measures to correct any problems that may surface.

    Samsung Electronics is a company held to the highest standards of working conditions and we try to maintain that at our facilities and the facilities of partner companies around the world.”

    If these accusations are true, Samsung will need to review much of its manufacturing operations in China for human rights abuses. The China Labor Watch report states that companies such as Samsung require “social responsibility audits” for their suppliers, but that such processes are susceptible to bribery and other types of corruption. The report singles out Samsung’s auditing company, Intertek, as “not trustworthy.”

  • ComScore Releases Latest Smartphone User Trends

    Some very interesting data coming out of ComScore today compliments of their MobiLens service. The numbers come from a survey of over 30,000 US mobile phone users in the three months leading up to February 2012.

    They provide a comparison between February 2011 and February 2012, in which smartphone usage climbed to 50% for the first time ever. They found Samsung to be the most popular device, with over 25% of the population using them. Next was LG with who had about a 20% market share, followed by Apple who had over 13%. Motorola and HTC held 12.8% and 6.3% respectively.

    Of course, most used the Google Android platform at just over 50%, followed by Apple iOS at about 30%. Just over 13% were using RIM, and 3.9% used the Microsoft operating system. Finally, 1.5% used the Symbian system.

    On their behavior on the phone, about 75% of users sent text messages, almost 50% used downloaded apps, just short of 50% used a browser to surf the web, and 36% used their phones to access social networking sites.

    For all those media enthusiasts out there, about one quarter of smartphone users took advantage of their devices for gaming and listening to music. I really thought this number would be higher.

    Anyway, those are the user trends in smartphones for the three months leading up to February 2012. Smartphone usage has reached 50% of the US population and it’s predicted to continue climbing throughout 2012.

  • iPhone Subsidies Destroying Consumer’s Perceptions

    Did you know that an iPhone or a new Android phone costs a lot more than we are led to believe? Most of the time we only consider the cost of the device when we sign up for a new contract with our cellphone providers. Usually the newest technology will run you anywhere from $99 all the way up to $399, but there’s more to it than that.

    Service providers like Sprint, AT&T, T-Mobile, and Verizon subsidies the cost of the phones. This means that they have to figure out a way to make up the difference between what you paid and what they owe the manufacturer for the phone. So if Verizon sells you an iPhone for $299 and it actually sells for $599, then they have to come up with $300 somewhere.

    Where do they make up the difference? In the contract. Over the two year duration of your contract they are paying Apple, Samsung, or Motorola the difference for your device. The cost is passed on to you, but you don’t realize it because it’s hidden in your monthly payments. It’s like buying a Cadillac for the price of a Chevy Cobalt.

    The only difference is the gas they sell you to power the low-priced Caddy costs $2 more per gallon than it would if you bought the Cobalt. If you consider all the gas you burn over the duration of ownership, you didn’t really get the Caddy for the price of the Cobalt. Many think this is deceptive and not healthy for consumer perceptions.

    At the rate which new technology is flooding the market, this Caddy for Cobalt price strategy is causing consumers to belittle the inherent value of their current device. It is a problem and it was the subject of debate at a recent technology summit where T-Mobile Chief Marketing Officer, Cole Brodman had to speak up and offer his opinion on the practice.

    Brodman comments:

    “Purchasing phones at steep discount (subsidized by wireless carriers) devalues the incredible technology innovations coming to market. It distorts the cost of devices and creates an uneven playing field for OEMs, carriers and retailers alike. Many Americans don’t realize the actual cost of the phones they’re purchasing with a two-year contract because the cost of that phone is included in the cost of their data plan and the fees associated with their contract. We’ve also unwittingly created a disposal marketplace for some pretty amazing products.”

    While there is no clear answer as to how we can convince consumers that their devices have a more inherent value than what they had to fork over just to get the newest technology in their hands, T-Mobile has launched a new series of plans that rewards customers for either sticking with their phones or purchasing new ones at an unsubsidized cost.

    Brodman comments on the new plans:

    “These plans break with the subsidy model. Instead, customers pay full price for a device in our line-up or set up payments in low, monthly installments. They can also bring their own device to our network. In return, we give them our most affordable rate plans.”

    Despite the sluggish US economy people don’t seem reluctant to spend their hard earned dollars on new technology and the latest devices. It seems manufacturers and marketeers are always finding new ways to entice us and disguise the true costs involved with new trends, but these expenditures always have to be dealt with in the end.

    Brodman address this sentiment in his comments:

    “In the future, my hope is we will see the U.S. industry follow our lead and move away from the subsidy-only model. Not only would this help level the playing field and foster competition, it would also help consumers by keeping rate plans affordable, providing more transparency in how they purchase wireless and it could encourage a robust, consumer-driven market for affordable (yet still amazing) used smartphones and tablets.”

    If you did carry-over your last device to a new contract, you should inquire about your plan. You may have a device coming your way that you are already paying for anyway, hidden in the cost of your monthly bill. Don’t let those dollars go to waste. If your contract has ended, ask about lowering your monthly payments based on the fact that your device should already be paid for.