Tim Cook introduced his new Iphone, kept for months in secret, and by the way, also his TV platform. The apple company starts competing with Netflix, Amazon and HBO.Tim Cook was playing a lot. Iphon provides the company with half of its net profit, which has been reduced by 12% over the same period last year. This situation had to be reversed and in order to do so I had the new Iphone.En Cupertino talked about the novelties and advances of the new device. But above all, the price of the new Iphone gave us a lot to say. In the Basque Country, the new Iphone 11 Pro (64 Gb) will be released at a price of €1,149. The Iphone has never been cheap. In 2007, the first model was released for $499, and since then, its prices have risen steadily, to the present astronomical levels.

Despite its high price, the new phone became the star of the Apple company in a short time. It is the main support of its profits and has helped it to be one of the most valuable companies in the world. In 2015, a company had the biggest profit in its history and made it the most profitable company in the world: It earned a net profit of $53,840 million and beat the previous record of ExxonMobil, which has a value of $45,200 million.

The Iphone has become an icon of today's society. Today it gives the prestige of being a car or a house. And hence the question: How much are we willing to pay? What value does it have? The answer is not simple, not unique, because the price of Iphone changes all over the world.

At one time, The Economist magazine created the Big Mac index. The famous McDonaldsen burger, which is consumed all over the world, studied exchange rates and local purchasing power from its price in several countries. An essential index to explain the Purchasing Power Parity Theory at the Economics Faculty.

A similar exercise has now done the portal Picodi.com. Comparing device prices with average incomes in different places, the number of working days in each place for the purchase of an iPhone was calculated.

The price of the iPhone to test

The results are curious. Switzerland takes 4.8 days to buy an Iphone. United States 5.8. In China it takes 30.4 days and in Mexico it takes 54.2 days. Differences in the euro area are also notable: If 6.7 days are needed in Luxembourg, in the case of Slovakia this figure rises to 31.7 days. Among these extremes are France and Spain, with 10.9 and 15.7 days respectively.

But is it just the price? Extensive studies have been carried out by a number of specialized media. In the portal TechInsights.com, for example, the device has been opened, each component has been analysed and the manufacturing cost of the iPhone has subsequently been calculated. According to this website, the production cost of the new iPhone 11 Pro Max is $490.50 (the most valuable component is Sony cameras and Intel processors). In the opinion of this portal, the Iphone has high quality materials and components and is better than the products of the competition. In any case, the market price of 11 Pro Max, which can reach $1,449, would triple the cost and get a margin of 65% (same previous model, Iphone X, margin).

The Smartphone market is competitive. New companies at lower prices, such as Xiaomi or Huawai, have achieved a high market share, but Apple is clear that that is not their league. Its main rival would be Samsung, which also offers a range of high-level phones with wide margins (the Galaxy S7, with 34%).

Apple operates in a luxury market and does it well. It is clear that the apple company works in the high-level sector and, although it gives us some hint, the use of average rents for the calculation of the Iphone index may not be the most representative.

Price, sustainable?

But there's another question. If the Iphone were not manufactured in China, but in the United States, would they have a price of EUR 1.149? The tricontinental organization, the Institute of Social Research, has analyzed the case of Iphon from the perspective of Marx's Exploitation Rate.

This approach analyzes all the factors needed for the production process of Iphone:raw materials (aluminum, cobalt, copper, carbon…), taxes and labor. Apple uses tax ingenuity to pay only 2% of taxes and everything, produced in the United States, would need 35% of taxes. As far as labour costs are concerned, account must be taken of all the work carried out throughout the production chain, particularly those working under very unfavourable conditions for obtaining raw materials.

Although iphone phones are designed in California, they are mainly produced in China, in the workshops of the company Foxconn. This company has been the subject of several investigations in recent years, due to the working conditions suffered by its workers. Suicide attempts among employees in 2010 sparked a debate on the employment situation in the Basque Country. About twenty people committed suicide in the Chinese factory in Shenzhen. In addition, since the launch of the Ipad in 2010, there have been two explosions due to the accumulation of aluminum dust in its factories, which have caused four deaths and 77 injuries.

There's another variable to take into account, the environmental regulations. It is much more flexible in the countries of Foxconn than in Europe or the United States.

The analysis based on Marx's Exploitation Rate analyzes all these variables and the result is undoubtedly hard: An iphone should have a price of $30,000 if made in the United States.

It is not my intention to start the debate on the Exploitation Rate from here in any way, and I am sure that the Tricontinental examination may have many nuances, but I think it gives us the opportunity to reflect.

If instead of Apple devices we talked about other consumer objects in our society, the consequences would also be obvious. Clothing, for example.

Zara, H&M or Primark costumes (to name a few brands) would have a much higher price applying the exploitation rate. However, it remains to be seen whether these prices would maintain mass consumption.

In recent years there has been a significant decrease in the wage level in our country. Society can hardly maintain its rate of consumption if we apply the real costs behind the products or, in other words, if we pay what the products really should have. However, they offer us a simple solution: instead of the real costs, low-cost products.

We have become a society that consumes Low Cost. Travel Low Cost, dress Low Cost and eat Low Cost, among other things, because we are also a society that has Low Cost wages, except for exceptions. And the question at the bottom is very clear: would our level of consumption, or rather, our level of well-being, exceed the filter of the Exploitation Rate? Or in other words: Are we not a society based on exploitation?