In the time when Apple Inc. (NASDAQ:AAPL) decided to manufacture its iPhone in Brazil, it was expected that around $12 billion will be invested in Brazilian industry. President Dilma Rousseff had hoped that the venture by Apple Inc. (NASDAQ: AAPL) will provide more jobs for the people of Brazil. Four years later, none of this has come true.
In 2011, Hon Hei Precision Industry Co. Ltd also known as Foxconn Technology Group, decided to make Apple products in Brazil. The decision of this Chinese electronics contractor brought hope among the Brazilian people. The venture promised creation of new supply chain that will provide new jobs and cut down the prices of Apple Inc. (NASDAQ:AAPL) products in Brazil. But when the situation is assessed in 2015, one finds that the company has fallen short of the promises.
As of now, the jobs awarded by Foxconn Technology Group are very few compared to the 100,000 jobs the company promised. So there is no technological advancement for Brazil as the President had so keenly hoped. The iPhone prices have not been cut down. In fact, it is available for twice the price in US a 32 GB iPhone 5S costs around $1000 without contract. This is among the highest prices in the world for iPhone.
The Brazilian Industrial Policy shared part of the blame for this policy. It has not monitored the situation well to derive the expected outcome. The productivity of Brazilian workforce is deemed poor. Foxconn Technology Group has focused on cutting edge robotics to cut down the human resource costs. The iPhone sales in Brazil have seen rise recently. The sales have increased more than 40% compared to last year.
While Apple Inc.’s (NASDAQ:AAPL) iPhone continues to benefit from Brazilian tax policies, it brings nothing to its people. The company had promised an industrial park near Sao Paulo 3 years ago, it is nowhere near to completion. Yet, surprisingly none of this has affected sales in Brazil. Still the company needs to think over its corporate social responsibility.
