Foxconn's shock announcement this month that it would double base pay for some of its workers may not hurt consumers but it is likely to lead to a fresh round of labour relocation within China.
"We frequently have double-digit percentage swings in the price of D-Ram [chips] or [LCD] panels, and those are the ones that matter," says Kevin Chang, a Citigroup analyst. "The impact from the recent labour cost changes is going to be minimal [on consumers]."
That is because Chinese labour accounts for just over 3 per cent of Foxconn's total cost of goods sold, and for an even lower percentage of the final retail price of products such as Apple's iPhone.
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