Apple Inc. Flashcards
1
Q
overview
A
- US BASED TNC for electronic tech
- headquarters in Cupertino, California
- largest IT company by revenue
- no 1 global brand by value
- 137,000 full-time employees
- over 510 retail/stores in 22 countries
2
Q
success factors for Apple
A
- stylish design
- marketing and branding
- innovation
- focus on mobility
- service ecosystem
- diversification as evolve
3
Q
apple spatial organisation
A
global design and production
- designed in Silicon Valley
- manufacturing outsourced to Taiwanese companies e.g. Foxconn with production largely in China
- Headquarters large in Cupertino, California
4
Q
spatial organisation- key locations
A
- USA: offices, research facilities, assembly plants, data centres
- Ireland: European HQ in Cork, employing 6000 workers (focus on iMac production and logistics)
- China: assembly hubs (Foxconn)- employs nearly 2 million workers
Retail distribution: - 511 retail stores globally
- 115 in Europe and Middle East, 42 in China
5
Q
why China for manufacturing?
A
- cost-efficiency : Low production costs + competitive contracts
- labour availability- skilled workers more willing to work for low wages
- incentives- Shenzhen’s special Economic zone encourages international companies
6
Q
positive impacts of Apples operations
A
- USA= employment of 90,000 ppl and expansion of facilities
- Ireland - 6000 jobs at Cork facility and 3000 in associated services
—> enhanced local infrastructure and reputation of hosting high-tech firms —> 53 languages spoken by workers = cultural diversity —> boost to Irelands economy and job market
7
Q
negative impacts of Apples operations
A
- criticism of low wages and labor conditions of Chinese factories
- limited job creation in Ireland with most high-skilled workers from other EU countries
- allegations of tax avoidance in Ireland loading to legal disputes
8
Q
trading and marketing
A
- market predominantly in rich countries
- 45% product sales= in USA
- services revenue is increasing
- Apple has to pay to import products back to US due to trade war between US and China = heavy tariffs in chinese imports to US
- more investments in US domestic suppliers now to support US economic resurgence and less tariffs
- competition from Chinese smartphone Huawei
- Apple attempted to expand Indian market but unsuccessful due to cheap competitors
9
Q
changes over time
A
- suppliers required to meet strict standards of the Apple supplier code of conduct —> standards apply globally (workplace rights etc)
- funding for more access to educational opportunities for supplier employees and communities
- carbon neutral since 2020 and foam to become carbon neutral across entire supply chain by 2030
- working to improve conditions around mining communities
- recycle and reuse programmes
- all assembly sites of major apple products = zero waste certified
- transport more by sea rather than air and packaging shrunk
10
Q
code of conduct
A
- Juvenile worker protections- juveniles employed most be of legal age (18+) and workers must not overwork (workers week restricted to 60 hours) and have health and safety and hygiene
- need access to toilets and water, dining and dormitories should be clean and safe
- must follow environmental permits and minimise energy and pollution
11
Q
tax practices
A
- apple uses subsidiary firms in other countries to declare profits and pay lower tax
- 2014 US and EU claimed Apple received favourable tax treatment from Irish government = tension
- 2016- concluded Apple had received illegal state aid from Ireland and ordered them to pay unpaid taxes
12
Q
China- how many ppl do Foxconn employ
A
- employ 1.3 million employees working on Apple products and supports 5 million jobs in the country
13
Q
China- labour practices
A
- working conditions- most live on site in dormitories, shops etc
Most= young, migrant workers who are working an average of 62 hours a week for around $300 a month (half of which is when up by living expenses)
Excessive hours etc is poor - health and safety- workers been exposed to toxic chemical used to clean products and sometimes earplugs and goggles aren’t available
- student and child labour- BUT apple now demanding contractors to limit student interns to just 10% of factories workforce
14
Q
China- environmental issues
A
- apple has a ‘Green my Apple’ campaign
—> uses 100% renewable energy in facilities. US = Apple Energy discovered
—> removes all OVC plastics and toxic chemicals from products
—> promoted recycling of its products - 2016- Apple issues a $1.5bn green climate bond —> dedicated to financing environmental projects
15
Q
Bangha Island, Indonesia
A
- raw material suppliers
- Indonesia mines provide 30% of worlds tin
- but miners work conditions are poor (1 person dies each week and relies on child labour)
—> damages 65% if forests and 70% of coral reefs and river pollution - Apple criticised for using poor subcontractors and tin from illegal mining —> BUT Apple claiming to fund a study in the situation
16
Q
Apple Park HQ, California
A
- dedicated to design green energy and future of tech
17
Q
Pegatron factory, Shanghai
A
- electronic manufacturing company that assembles iPhones
- many issues and concerns and working conditions in Shanghai’s factors
—> no basic health and safety training, overlong hours ($1.50/ hour) and no acceptance to take days off - Pegatron was used after Foxconn crisis where at Foxconn 18 ppl committed suicide due to working conditions and 14 died at manufacturing facilities
—> BUT after Foxconn made effort to improve work conditions (used Apple code of conduct)
18
Q
where’s Apple trying to start production
A
- in India and have more sales in India they lowered prices to try and achieve this
