GG: Apple Flashcards
What is Apple?
Is a US transnational electronic technology corporation, with its company headquarters based in Cupertino, Northern California.
What is the history of Apple?
- started in 1976, in the early days of personal computer manufacture.
- in 1982, took over the smaller Maclintosh and achieved more success after launching a new brand of desktop, Maclintosh - later then Applemac computers
- Apple computers earned a growing reputation for quality and gathered a niche market and many loyal customers
- since 2000, it has experienced phenomenal growth due to development of mobile and Wi-Fi devices
What are some facts about Apple?
- produces IMacs, iPhones, iPods, iPads and in 2015, launched the new Applewatch and Apple TV
- Apple is the 2nd largest IT company by revenue (after Samsung)
- 3rd largest Mobile phone manufacturer.
- largest music retailer (iTunes Store)
- number one global brand by value (US $145 billion)
- 98,000 full-time employees and over 450 retail stores in 16 countries
- in total assets = US $207 billion
What’s the spatial organisation of Apple?
Apple is a truly global company. Their main products are designed in Silicon Valley, California, made in Mainland China by Foxconn - a Taiwan based company and sold all over the world, especially to developed countries.
- headquarters and research & design centre on Apple Campus in Cupertino, California
- 3 further data centres in the USA - 2 more in California at Newark and Santa Clara and a newly built centre on the Eastern Seaboard of the US at Maiden, North Carolina
- the concentration of R&D and data centre locations in Silicon Valley , Cali is a good example of agglomeration - typical of high tech industries where info exchange and access to well qualified/expert staff
- Apple has its EU headquarters in Cork, Ireland, where it employs 4000 workers on its iMac production line and also has a customer support and online store call centre
- assembly of apples main products is outsourced to Foxconn - main base in Foxconn City, Shenzen in Guangdoug province, Hong Kong, also factories in Chengdu, Sichaun Province and in turn subtracts to components manufacturers elsewhere in china.
What is the production like in Apple?
- Apples mainstream products are produced in China:
—> large source of highly skilled, hard-working but low paid workers - good for china as it provides some investment into the country and generate jobs
—> number of mainly Taiwanese companies competed for Apple manufacturing contract, which forced down production costs.
—> Shenzen was the location of Chinas first and most successful Special Economic Zone (SEZ) offering a number of incentives to attract foreign companies
What are the tax practises for Apple?
- Apple have been accused of corporate tax avoidance. As a TNC operating in a number of countries, apple can use subsidiary firms in other countries to declare profits and pay a lower rate of tax.
- in 2014, both the US senate and the EU claimed that apple had received favourable treatment on tax from the Irish gov, a claim that was strenuously denied. Also caused tension between the USA and EU, as each claimed that Apple owed them tax on their profits these tensions expose a flaw in an increasingly globalised world.
- taxations system need to be updated to accommodate large TNCs (like Apple), which manufactures most of its projects in China but derives the majority of its profits from ‘intellectual property’ marking and branding, which can be funnelled through a maze of subsidies. Apple is not alone in claiming that profits from large chunks pf its intellectual property are generated outside the USA.
What are the environmental issues in China?
- criticisms have largely come from Greenpeace as they carry a lot of influence and produce a ‘green electronics guide’ which ranks companies on their environmental performance - apple was criticised on 4 main counts:
1. It’s reliance on non-renewable resources to supply electricity to its data centres.
2. Use of toxic chemicals such as PVC and brominated flame retardants in their manufacturing processes.
3. Factories in china were discharging pollutants and toxic metals into local water supplies, threatening public health.
4. The lack of recyclability of many Apple products - it has responded by launching its ‘green my apple’ campaign to improve its green credential, it now uses 75% renewable energy, investing in a large solar farms to power its data centres.
- made the decision to remove PVC plastics and brominated chemicals form its products - as a result it has moved up the green electronics ranking from 11th in 2006 to 6th in 2012
What are some of the impacts on China and their working condition?
- in 2006, it was reported that 200,000 workers who lived and worked in the Shenzen factory were regularly working more than 60 hours a week for around $100 a month, half of whcih was taken up by living expenses. Media reports used the term ‘sweatshop conditions’ and reported enforced overtime - none of which enhanced Apples reputation.
What are some of the impacts on Chinas health and safety?
- in 2010, 50 worker at Lianjian Technology (a company subcontracted by Foxconn) in Suzhou, Jiangsu province, were poisoned by a toxic chemicals used to clean IPad screens and decided to sue apple. In order to reduce costs, adequate ventilation had not been installed. Most cases were settled out of court.
What are some of the impacts on Chinas student and child labour?
Foxconn’s use of students and children in part of its objective in maintaining a low-cost and flexible labour force. Employees under 18 are subjected to the same working conditions as the adults. Provincial authorities supported by the policy are allowing them to be graded as interns or trainees; uni students were forced to work as a condition of graduating.
What are the impacts on Chinas suicides?
- suicides reported in 2009-10 probably brought most damage to Apples reputation as a business. In 2009, a Foxconn factory worker committed suicide after pressure following the disappearance of a prototype model of an iPhone 4. By the end of 2010, a total of 14 suicides had occurred, largely as a consequence of the severe working conditions.
How has the impacts in China affected Apple?
These practises and their consequences have put enormous strain on the business relationship between apple and Foxconn, but it is very difficult and costly relationship for apple to extricate itself from. In response, apple now has a ‘supplier code of conduct’ and it audits supplier factories regularly.
What is Foxconn?
Foxconn city is a business park and has a number of factories belonging to different manufacturers who assemble high tech products for well-known brand names including Sony, Dell, etc, thus it is dubbed ‘Chinas Silicon Valley’. The park is self-contained with high security and most workers live on site where there are dormitories, shops and cafes.
- over 400,000 workers employed here - wagers paid on site are around $150 to $200 per month, which is above average minimum wage and higher than in others parts of Shenzen and China.
What are the positive impacts of Apple in Ireland?
- the HQ is based at Hollyhill, north side of Cork. It is the only fully Apple owned manufacturing facility in the world. Lured to move to Ireland due to the 12.5% corporation tax (2nd lowest in EU)
- employs 4,000 workers directly on its IMac production line and call centre, Corks largest private employer
- Apples presence generated up to a further 2000 jobs employed as part of the supply chain or ancillary work
- attracted other high-tech firms to join the area
- attracted a highly skilled workforce and provided an inspiration for local education, R&D
- company has expanded and contributed to infrastructural improvements in the city.
- Apple has enhanced the Republics reputation for hosting high-tech TNCs whcih contributed to the ‘Celtic tiger’ economy of the 1990s and early 2000s.
What are some of the negative aspects of Apples involvement in Ireland?
- many of the more highly skilled workers at Hollyhill are foreign nationals (mainly from the EU), so Apple is accused of not creating sufficient work for local people. - however this has helped Cork become a more vibrant cosmopolitan city and that at least 60% of the workers are Irish (though the majority of these are production line workers)
