Apple Case Study

Question 1

Why are Apple’s mainstream products produced in China?

Answer 1

China has a large young, skilled, ununionised workforce who are willing to work long hours.

Question 2

What type of workforce does China have which attracted Apple to produce there?

Answer 2

A large young, skilled, ununionised workforce who are willing to work long hours.

Question 3

Why does Apple outsource to Foxconn?

Answer 3

Foxconn competed for Apple’s manufacturing contract on the basis of low production costs.

Question 4

Which production system does Apple use?

Answer 4

Lean production

Question 5

What are the benefits of Apple using lean produciton?

Answer 5

Reduces stock piling.
Reduces Costs which generates profits

Question 6

Since 2018, where has Apple notably expanded within?

Answer 6

The USA, mainly Austin, Texas where it manufactures the MacPro.

Question 7

Where are components shipped from to manufacture the MacPro in Austin?

Answer 7

Around the world, inluding China.

Question 8

Where is Apple’s Middle Eastern, Europe and African headquarters?

Answer 8

Cork, Ireland.

Question 9

How many workers are employed in Corks iMac production line?

Answer 9

6,000

Question 10

What other reason places importance to Cork’s role in Apple?

Answer 10

Cork acts as the global transport linguistics hub for Apple, where they organise shipments.

Question 11

How many people are indirectly employed by Apple in manufacturing?

Answer 11

Around 2.5 million people.

Question 12

How many times more people are indirectly employed by Apple than are directly employed by Apple?

Answer 12

Nearly 20 times more.

Question 13

Spatial Organisation and Linkages: Where are Apple’s main products designed?

Answer 13

In Sillicon Valley, California.

Question 14

Where are Apple’s main products made?

Answer 14

In mainland China, by Foxconn.

Question 15

How many data centres does Apple have in the USA?

Answer 15

Five.

Question 16

Where are Apple’s five data centres in the USA located?

Answer 16

Two in California in Newark and Santa Clara
Another two in west USA
One in North Carolina

Question 17

Where is there another data centre being planned to be built in the USA and why?

Answer 17

In Iowa, for the mid 2020s in order to better serve North American users of siri and iMessage.

Question 18

How many people does Apple employ over all 50 states of the USA?

Answer 18

90,000

Question 19

How many retail stores does Apple have?

Answer 19

511

Question 20

How many of Apple’s retail stores are in the USA?

Answer 20

Over half.

Question 21

How many of Apple’s retail stores are in Europe and the Middle East?

Answer 21

115

Question 22

How many of Apple’s retail stores are in China?

Answer 22

42.

Question 23

Where is Foxconn’s main assemby point?

Answer 23

Shenzen.

Question 24

Where else in China does Foxconn have large assemby points?

Answer 24

Zhengzhou, CHengdu, Sichuan province, Henan province.

Question 25

How many people does Foxconn employ in their assembly plants for Apple?

Answer 25

Nearly 1 million.

Question 26

What is the average time Foxconn employees work and for how much money?

Answer 26

Average 62 hours a week for $300 a month, half of which is spent on rent.

Question 27

Where do Foxconn employees live?

Answer 27

On site, where there are shops, cafes and dormitories.

Question 28

What is the danger of working an an assembly point for Foxconn?

Answer 28

Workers are exposed to toxic chemicals which are used to clean the products.

Question 29

What has been suggested about safety equipment for workers at Foxconn?

Answer 29

Safety equipment has not been available such as earplugs and goggles.

Question 30

In 2017, what news came out about Foxconn employees?

Answer 30

Student interns were working excessive hours against company policy.

Question 31

What are the laws for under 18s working in China?

Answer 31

They are allowed to be employed as interns or as trainees.

Question 32

Why does Apple not hold the same employment rights as China for under 18s?

Answer 32

Because Apple has a social responsibility commitment.

Question 33

What does Apple demand of employers in Foxconn regarding u18 interns and trainees?

Answer 33

Employers must limit student interns and trainees to 10% of their workforce.

Question 34

How has Apple responded to ensure student intern or trainee workforce is kept below 10% in Foxconn?

Answer 34

They have a Supplier Code of Conduct and audits thier supplier factories regularly.

Question 35

How many jobs has Apple's presence in Cork generated for ancillary work?

Answer 35

3,000 jobs.

Question 36

Where is the European headquarters in Cork?

Answer 36

Hollyhill Campus.

Question 37

How many workers does Hollyhill Campus employ? And in what field of work?

Answer 37

6,000 workers in the production line or in customer service/support.

Question 38

When was Apple lured to Ireland?

Answer 38

In 1980.

Question 39

Why was Apple lured to Ireland when it was?

Answer 39

Ireland was going through a time of high unemployment and so had set a 12.5% corporation tax (2nd lowest in the EU) in order to attract FDI to create jobs in the area.

Question 40

How does Apple being in Cork enhance Ireland's global connectivity?

Answer 40

They employ over 100 people in the logistics team, organising shipping to over 50 countries.

Question 41

Why has Apple's presence in Cork been ciritisised?

Answer 41

Because alot of the workers are foreign nationals and Apple has been critisised for not creating jobs for locals.

Question 42

How many different nationalities work for Apple in Cork?

Answer 42

90.

Question 43

What percentage of Apple in Cork's employees are Irish?

Answer 43

60%

Question 44

What was Apple's 'Green My Apple' campaign a result of?

Answer 44

Criticisms from Greenpeace in the 2000s.

Question 45

What did the 'Green My Apple' campaign consist of?

Answer 45

Using 100% renewable energy, using Apple Energy which is mostly solar power. Removing all PVC plastics and toxic chemicals from its products. Promoting recycling of all of its products.

Question 46

What has been the backlash to the campaign of promoting recycling of all Apple products?

Answer 46

The lack of repairability of Apple products is still and issue and people feel as though it is a tactic to surge money from consumers.

Question 47

What did Apple issue in 2016 regarding environmental projects?

Answer 47

Apple issued a $1.5 billion green climate bond to which proceeds are dedicated to the financing of environmental projects.

Question 48

Between 2006 and 2017, where did Apple move to and from in Greenpeace's 'Green Electronics' ranking?

Answer 48

11th to 2nd.

Question 49

How much has service revenue for Apple increased between 2013 and 2020?

Answer 49

More than threefold, from $13.5 billion in 2013 to more than $50 billion in 2020.

Question 50

What type of country is Apple's main consumer?

Answer 50

Richer, more developed countries.

Question 51

In 2019, what percentage of Apple's product sales were to the USA?

Answer 51

45%

Question 52

Which nation became Apple's second largest market temporarily in 2015-16? And who re-established themselves in 2017?

Answer 52

China. Europe re-established itself.

Question 53

Why is Apple facing high tariffs to imports to the USA?

Answer 53

USA has implemented high tariffs on Chinese imports in order to promote domestic markets. This means Apple has to pay to import their manufactured products back to the USA.

Question 54

What is the result of Apple paying high tariffs on their imports to the USA?

Answer 54

This increases the costs of their product and will likely increase the sales cost on the shelf for the consumer.

Question 55

How is Apple trying to combat high tariffs?

Answer 55

By establishing manufacturing plants in the USA. Despite this, costs may still be high because of higher labour costs and more expensive materials.

Question 56

How many jobs has Apple pledged to create in the USA to promote domestic markets?

Answer 56

20,000.

Question 57

How much has Apple pledged to invest between 2018 and 2023? And why?

Answer 57

$5 billion in order to support innovation among USA manufacturers.

Question 58

What has encouraged domestic manufacturing of Apple goods in the USA?

Answer 58

Federal tariff exclusion zones in Austin, Texas. This means they do not have to pay taxes on imported goods there.

Question 59

Why was Apple's attempt to enter the Indian market a fail?

Answer 59

Because the phone and tablet market is led by cheaper competitors.

Question 60

What has happened to the Apple market in China following its peak in 2016-17?

Answer 60

It has plateaued and potentially met maturity.

Question 61

Why does China remain a strong potential market for Apple?

Answer 61

Because of China's large iPhone user base.

Question 62

Which smartphone manufacturer is Apple facing comeptition from in China?

Answer 62

Huawei.

Question 63

What does Apple's role as a TNC tell us about the company?

Answer 63

Apple is quick in demonstrating how it can respond to chances in markets, geopolotics and incentives by redirecting investment.

Question 64

What does Apple's well-organised supply chain tell us about the company?

Answer 64

Apple can reduce costs and inrease profits in a way which is beneficial to all.

Question 65

How much did Apple stock share prices drop within a week of DJT imposing the 'liberation day' tariffs on China?

Answer 65

22.99%

Question 66

What did Trump do regarding smartphones and computers following his 125% retaliation tariffs on Chinese imports?

Answer 66

Exempts smartphones and computers from the tariffs.

Question 67

What are the impacts of exempting phones and computers from 125% tariffs on Apple?

Answer 67

This saves Apple millions of $ as they do not have to relocate their assembly or manufacturing plants to the USA. Also protects them as the largest phone company as they dont have to raise prices and dont become 'exclusive'.