Apple

Question 1

Who are apple

Answer 1

• producer and retailer of computer tech and mobile electronic devices
• US TNC started in 1976 and is now the second largest IT company by revenue (behind Samsung)
• third largest mobile phone manufacturer
• largest music through ITunes
• number one global brand by value ($145 billion)
• 98,000 employees over 450 retail stores in 16 countries
• 11th largest TNC globally (total assets = $207 billion)
• market predominately in richer, developed countries -> 2011 = 44% sales in the USA (young avg 31, wealthy earning 26% more than min wage and educated 58% graduates)

Question 2

Headquarters and employees (spatial geography of apple’s operations)

Answer 2

• HQ + R&D centre are together on the apple campus in Cupertino, California
• most apple employees based in the developed world, mainly in the USA. This reflects the high tech and knowledge intensive nature of its business

Question 3

Research and development (R&D) (spatial geography of apples global operations)

Answer 3

• centre is in Silicon Valley, California
• EU HQ in Ireland, Cork -> employs 4000 workers on its IMac production line + also has a customer support and online store call centre
• of its 453 retail stores 110 are in Europe and the Middle East and 25 are in China, where it has increased its market by 600 million people

Question 4

Production (spatial geography of apples global operations)

Answer 4

• mainstream products are produced in China for a number of reasons:
  > large source of highly skilled workers, hard working but low paid -> good for China as FDI generates investment + jobs
• Shenzen was the location of China’s first and most successful special economic zone (SEZ) offering a number of incentives to attract foreign companies
• Foxconn city (in Shenzen, it’s a business park)

Question 5

What has been the impact of Apple operating in Ireland

Answer 5

• only full apple owned facility in the world
• apple were lured into Ireland by its 12.5% corporation tax
• generally positive:
  > 4000 employees -> Corks largest private employer
  > companies presence has attracted other high tech firms
  > attracted a highly skilled workforce + provided an inspiration for local education, R&D
  > contributions to infrastructure improvements in city
  > together with other companies, apple has enhanced the Republic of Ireland reputation for hosting high tech TNC
• NEGATIVE:
  > workers are foreign nationals, criticised for not making work for locals
• tax practices: accused of tax avoidance -> derives profits from intellectual property

Question 6

What has been the impact of apple operating in china (labour practices + student/child Labour)

Answer 6

• labour practices:
  > working conditions: in 2006, 200,000 workers who lived + worked in the Shenzen factory were working 60+ hours a week for around $100 a month, half of which was taken up by living expenses -> reported enforced overtime in ‘sweatshop conditions’
  > health + safety: in 2010, 50 workers at Lianjian technology (company subcontracted by Foxconn) were poisoned by toxic chemical used to clean iPad screens and decided to sue apple -> in order to reduce costs adequate ventilation had not been installed -> most cases were resolved out of court
• student + child Labour: Foxconn used them to maintain low cost and flexible labour force. U 18’s forced to work in same conditions, this was supported by gov by allowing them to be graded as interns
  -> uni students forced to work as a condition of graduating
  > suicides: 2009, a factory worker committed suicide after coming under pressure following the disappearance of an iPhone 4 -> by the end of 2010 a total of 14 suicides had occurs, largely as a consequence of severe working conditions

Question 7

What has been apples impact on the environment

Answer 7

• criticisms have largely come from Green peace. As global environmental campaigning group, they carry a lot of influence and provide a Green electronics guide which ranks companies on their environmental performance.
• apple was criticised on 4 main counts:
  > it’s reliance on non-renewable resources to supply electricity to its data
  > use of toxic chemicals such as PVC and brominated flame retardants in their manufacturing process
  > factories in China were discharging pollutants and toxic metals into local water supplies, threatening public health
  > the lack of recyclability of many apple products

Question 8

What is apples response to their impact on the environment

Answer 8

• Green apple campaign to improve its credentials. Now used 75% renewable energy investing in large solar farms to power its data centres
• it made the decision to remove PVC plastics and brominate chemicals from its products and has started to promote its products as a result it has moved up the Green electronics ranking from 11th in 2006 to 6th by 2012