1.5 Apple

Question 1

How do TNCs use the NIDL?

Answer 1

• Apple exploits the NIDL as there is a spatial division of labour where the national scale in no longer dominant an jobs are moved overseas. Production processes are relocated to developing countries due to technology and low cost locations
• The industrialized economies’ share of manufacturing declined from 95% to 77%, and the developing economies’ share more than quadrupled from 5% to 23%

Question 2

What are some facts for Apple?

Answer 2

• Net worth %2.9tn
• 38% market share in mobile phones
• Number one global brand by value - $2.9tn
• Assets worth 145bn

Success due to: well designed products, slick marketing and branding, innovative products, loyalty mobile devices, selling music and apps

-44% sales in US however most of its growth been outside the USA, especially in the Asia -Pacific region

Question 3

What is the spacial organisation of Apple?

Answer 3

• HQ and research and design centre in California - this is where it was founded and there is a high supply of skilled workers - tradition and integrity
• 3 more data centres in US - 2 in California and one in North Carolina
• European headquarters in Cork - 4,000 workers on iMac production line
• Assembly lines outsourced to Foxconn, Taiwanese companies with factories in China namely Shenzhen SEZ. High tap of specialized cheap labour, tech and transport advancements and low costs for labour capital and infrastructure - competition drove price down - increased competitiveness and lower barriers to entry to encourage market penetration.
• 453 retail stores - 110 in Europe and Middle East, 25 in China - market grown by 600 million - larger markets due to demographics and nearer to markets.

Question 4

What is Apple’s production chain like?

Answer 4

Supply of highly skilled, hard woring but low paid workers - good for China as provides investment. Taiwanese companies competed for the contract forcing down production costs.

• Shenzhen became the first SEZ offering incentives to attracting TNCs
• Foxconn city business park - 400,000 workers, workers paid $150-200 per month
• Gets resources such as silicon and silver from China, Uzbekistan, DRC as it is cheap, untapped and has low barriers to entry to extract.
• Suppliers in 43 different countries using 70 elements in the iPhone - gold, silver, copper - 7 metals in just the chip - China has high proportion of elements - 80-88% of rare earth materials.

Question 5

What are the impacts on Ireland?

Answer 5

• Only 12.5% corporation tax
• 4,000 workers
• 2,500 jobs for workers employed
• Attracted other high tech firms - hosts high tech TNCs

However, many of the workers are foreign nationals although at least 60% are Irish and Cork has grown as a result.
-Apple has also been accused as tax avoiding by setting up here

Question 6

Impacts on China?

Answer 6

• 200,000 workers in Shenzhen work over 60 hours a week for $100 a month
• 50 workers at Lianjian technology poisoned by toxic chemical
• Child labour - children subjected to same working conditions as adults
• Suicides - 14 suicides occurred in 2010
• Environmental issues - relies on non-renewables, uses toxic chemicals, discharges pollutants and hardly recycles