Today we learned about Karl Marx and how he viewed
capitalism to work. He viewed the entire history of man as based on class
struggle and the lower classes attempting to get together to overthrow those
who are in power. Capitalism works in countries because it produces surplus
value through the exploitation of alienated labor and is based completely on
private property. So when people are able to make a profit off of owning
something that is built by other people, this is how the bourgeoisie and
proletariats are created. He views capitalism as a stage or progression in
human history that will later end in people choosing communism as the best form
of political and economic life. We discussed in class today how much it costs
to actually make an iphone and how much apple makes off of the sale in surplus
value. I looked up on the Internet how much it costs and was actually really
surprised by how much it was. On this website http://www.pcmag.com/image_popup/0,1740,iid=316159,00.asp I found that it actually costs a lot more and
Apple is only making like a $10 profit off of the transaction. So when they
have to buy all of those parts to put them together they aren’t making nearly
as large of a profit as we thought they would be. But I guess all of those
other companies that are selling their parts to apple are making a surplus
profit on that and continuing the cycle of the bourgeoisie. It says that the
manufacturing costs were only $8 and I have to assume that means labor because
all of the rest of the money was going to parts. So if that means that only $8
of the $200 iphone is going to labor and other manufacturing, that is really low.
For the people who are doing the work they are making such a little amount of
the money, and I know this is exactly what Karl Marx is talking about. But I just wanted to see if people had a reaction
to that and if anybody else was as surprised as I was about how much it
actually cost to make the Iphone and if people are overestimating how much surplus
profit there really is?
Matt Wagner
This post should note that the table presented here displays phone prices given that you will take on a service contract with a service provider. One can buy an Iphone from from a service provider like AT&T for a less expensive price, given that one also purchases a service plan. Apple itself, however, has been selling the Iphone 5s for about $700 to these companies, who turn it around and sell it for a less expensive price given that one purchases a contract with the phone. The idea is that the contract will make up for the loss in revenue over time.
ReplyDeleteHere is a link to prices for Apple's phone's from their website. If one scrolls down to their "T-Mobile Contract-Free" option, one can get a better idea of the price of a new model Iphone prior to any price reductions due to plans. It ranges in price from $650-$850.
http://store.apple.com/us/buy-iphone/iphone5s
Here also is a link to various contracts. It allows comparing between various providers. One can see that AT&T's most expensive plan goes for $530. Easily enough to make up the loss of revenue in the first couple months after consumer purchase.
https://static.ips.apple.com.edgekey.net/ipa_preauth/content/catalog/en_US/index.html
The point is, the surplus revenue is definitely there, and it is not being significantly underestimated with respect to Apple or the service providers.