APPLE TNC

Question 1

Location of Apple headquaters?

Answer 1

Apple
Park in Cupertino, northern California

Question 2

When did the company start operating?

Answer 2

The company started business in 1976, in the early days of personal computer manufacture. In 1982 it took over the smaller MacIntosh organisation and launched a new brand of desktop computer that later became AppleMac

Question 3

When did Apple first start seeing big growth?

Answer 3

2000 with mobile and WiFi devices

Question 4

Comment on Apple’s rank in 2019 (a. revenue b. phone producer c. global brand)

Answer 4

● largest IT company by revenue
● third-largest mobile phone manufacturer
● number one global brand by value (US$234 billion).

Question 5

Prove that Apple is a global TNC

Answer 5

It has 137,000 full-time employees and over 510 retail
stores in 22 countries.

Question 6

Apple is a truly global company with a distinctive geography.
Their main products are designed in —————— made in ———-by ————–, a Taiwan based
company, and sold all over the world.

Answer 6

Apple is a truly global company with a distinctive geography.
Their main products are designed in Silicon Valley,
California, made in mainland China by Foxconn, a Taiwanbased
company, and sold all over the world.

Question 7

Which companies hire more people - Apple or companies that manufacture Apple products?

Answer 7

Those manufacturing Apple
products however are employed by other companies
and number up to 2.5 million, nearly 20 times those
employed by the company itself.

Question 8

Where are Apple’s data centers located?

Answer 8

It has five data centres in the USA – two in California
at Newark and Santa Clara, a further two in western
USA at Reno, Nevada and Prineville, Oregon and one
on the eastern seaboard of the US at Maiden, North
Carolina.

Question 9

Where is Apple’s HQ for Europe, Middle East and Africa?

Answer 9

Cork, Ireland, where it employs 6,000
workers on its iMac production line.

Cork also acts as
the global transport logistics hub for Apple, organising
shipments of assembled iPhones and iPads around the
world.

Question 10

To whom does Apple outsource the production of iPads and iPhones? In which city do they assemble iPhones?

Answer 10

Assembly of Apple’s main products, iPhones and iPads
is outsourced to partner companies Foxconn and
Pegatron – both Taiwanese electronics corporations.
Foxconn is Apple’s longest-running partner; its main
production base is in Foxconn City, Shenzen near Hong
Kong.

Question 11

Does the distribution pattern of Apple retail stores resamble the Core-Periphery model?

Answer 11

Yes.

Of its 511 retail stores, over half are in the US, 115 are
in Europe and the Middle East and 42 are in China,

Question 12

Provide two reasons why Apple products are produced in China

Answer 12

. ● they are able to outsource production to established
Taiwanese electronics firms such as Foxconn, who
competed for Apple’s manufacturing contract on the
basis of low production costs
● there is a large, young, skilled and non-unionised
workforce who will work long hours for relatively low
wages
● Shenzen was the location of China’s first and most
successful Special Economic Zone (SEZ) offering a
number of incentives to attract foreign companies.

Question 13

Describe Apple’s spatial organisation when it comes to the supply chain:

Answer 13

It arranges for different
components to be shipped directly from their various
original sources to the assembly complexes in China.
This reduces stockpiling and the number of warehouses
to one centralised location in California. This exceptional
inventory management reduces costs and generates
higher profitability compared to its competitors.

Question 14

Does Apple own any of the manufacturing facilities?

Answer 14

It generally outsources production

Apple’s European HQ is based at Hollyhill Campus,
on the north side of Cork. It is the only fully Apple owned
manufacturing facility in the world

Question 15

Why did Apple pick Ireland as its HQ location?

Answer 15

Apple was lured to locate in Ireland in 1980, at a time of high unemployment, by the government’s 12.5 per cent
corporation tax, the second lowest in the EU.

Question 16

Comment on Apple’s two positive impacts on Ireland and one negative:

Answer 16

POSITIVE
● Apple’s presence in Cork has generated around 3,000
jobs for workers employed in ancillary work.
● The company’s presence in Cork has attracted other
high-tech firms to the area.

NEGATIVE
● Many of the more highly skilled workers at Hollyhill are foreign nationals (mainly from the EU), so Apple is criticised for not creating sufficient work for local people.

Question 17

What does Apple do in order to pay lower taxes?

Answer 17

As a TNC operating in a number of countries, Apple uses subsidiary firms in other countries to declare profits and pay a lower rate of tax. In 2014, both the US and the EU claimed that Apple had received favourable tax treatment from the Irish government.

Question 18

Why is a TNC such as Apple difficult to manage in taxation terms?

Answer 18

Systems need to be updated to accommodate large TNCs such as Apple, which manufactures most of its products in China but derives the majority of its profit from ‘intellectual property’, marketing, patenting and branding, which can
be funnelled through a maze of subsidiaries.

Question 19

Comment on the effect of Foxconn on the working conditions in China

Answer 19

They work
an average of** 62 hours each week for around $300 per month, half of which is taken up by living expenses**. Media reports suggest that **excessive hours **and other problems may persist, despite Apple’s attempts to peform factories following reports of alleged poor
working conditions.

B. Workers in the past have been exposed to toxic chemicals used to clean the products.

C. Quanta Computer, another contractor which
manufactures Apple Watches, was found to have been employing high school students as interns.Factories are allowed by provincial authorities in China to employ under 18s as interns or trainees, but Apple do not because of their commitment to social responsibility.

This is an example of how different ‘norms’ are accepted and interpreted by different societies and how this poses problems for many large ‘western’ companies seeking to outsource their production.)

Question 20

Outline Apple’s positive and negative impacts on the environment

Answer 20

Positive:

uses 100 per cent renewable energy in its facilities in the US and has established its own energy company, Apple Energy, generating electricity mainly from solar power

Negative

Lack of “repairability” ?