How many people does it take to make 9 million Samsung Galaxy S III smartphones?
Over the last year, a truly huge number of column inches has been dedicated to Apple’s relationship with Foxconn, the Taiwan- and China-based manufacturer who produces the iPhone and iPad. First those stories revolved around a spate of suicides and explosions, then we boggled at the fact that Foxconn has 1 million employees, and finally the news cycle was rounded out with Apple working hard to improve worker conditions at the factory — and its public image.
For a company as large as Apple — to date it has sold around 200 million iPhones and 80 million iPads, and it’s by far the most valuable company in the world — such scrutiny is inexorable, but it also means that other companies tend to get washed away by a tsunami of Apple press. Take Samsung, for example, a South Korean conglomerate with 350,000 employees worldwide and $220 billion in revenue in 2010 — more than twice Apple in 2011, its biggest year yet (by far). While Apple has sold 180 million iPhones in total, Samsung sold 300 million phones in 2011 alone — and its market share is increasing. On the back of the Galaxy S2, Samsung’s smartphone market share in the US rose from 10% to 24% between 2010 and 2011. Worldwide, Samsung is by far the largest smartphone maker.
Which brings me neatly onto the Galaxy S3. This morning, Reuters announced that pre-orders of the Samsung Galaxy S3 now total 9 million. This is huge. First-weekend sales of the iPhone 4S totaled “just” 4 million. 9 million would make the Galaxy S3 the fastest selling gadget ever — a title currently held by Microsoft’s Kinect, which sold 8 million units in 60 days.
Buried at the bottom of the Reuters report is another equally interesting tidbit: According to an unnamed Samsung official, its smartphone factory in South Korea is running at “its full capacity of 5 million units per month.” Back in March, a Foxconn insider said the company was gearing up to produce 57 million iPhone 5 handsets this year — divide that by 12, and you get 4.75 million units per month.
Now, I’m not entirely sure how Samsung does this, but South Korea actually has a rather high income per capita — $24,000 — and the average monthly salary for a factory worker is $2000 per month. The average monthly wage for a Chinese Foxconn worker is only $400. As far as I can tell, this simply means that Apple pays significantly less to produce its iPhones. A report from February confirms this disparity: If you average it all out, Chinese workers get $8 per iPad, while Korean workers get $34 per iPad.
If we throw some other numbers into the mix, we can derive some other interesting facts about the manufacture of Apple and Samsung smartphones. In March, what seems like the diary of a Foxconn worker was published on the web. This worker, named Li Qi, says that in the lead-up to the launch of the new iPad, his production line churned out 150 iPads per hour. Li Qi’s base wage is 2,350 yuan per month ($370) — and considering Foxconn employees work six days a week and eight hours per day, that means he gets paid around $15 per day, or $1.85/hour.
Looping back around to that $8-per-iPad figure: If the team produces 1200 iPads during an 8-hour shift, and they get $8 per iPad, then it costs Foxconn $9,600 to staff each production line for a day. Divide that by the employee pay of $15-per-day, and we get 640 — the number of workers on each production line.
We’re not done yet! Another report from a Foxconn worker says that iPhone production lines are expected to spew out 3,500 units per day. We don’t know if this is because iPhone production lines have more workers, or because they’re easier to make. If we assume the latter, then 640 employees can create 84,000 iPhones per month (before overtime). If the Galaxy S3 is roughly equivalent to the iPhone 4S in terms of manufacturing complexity, then Samsung’s South Korea factory must have 60 production lines to produce 5 million Galaxy S3s per month, for a total of 38,400 workers.
This might seem like a fairly small number compared to Foxconn’s city-sized factories, but it’s more than 10% of Samsung’s total workforce, or more than Google’s entire workforce. It’s also worth noting that Samsung produces almost every component found inside the Galaxy S3, too, from the Exynos processor, to the OLED display, to the RAM and NAND flash — so, all told, we’re probably looking at at least 75,000 people working flat out to produce the first 9 million pre-orders, and then the tens of millions of Galaxy S3s that will be sold in 2012.