Apple Inc. TNC Case Study Flashcards
What does Apple do?
Produce and sell computer technology and mobile electronic devices.
Where are Apple headquarters located?
Cupertino, northern California
In which year were Apple Watches launched?
2015
When did the company start?
1976
What did Apple do in the early days? (1976)
Manufacture PCs
Which organisation did Apple take over?
MacIntosh
When did Apple take over MacIntosh?
1982
After taking over MacIntosh, how did Apple achieve more success?
It launched a new brand of desktop MacIntosh (now AppleMac)
What did AppleMac computers gain a reputation for?
Quality
What type of market did AppleMacs attract?
A niche market
What has Apple experienced since 2000?
Phenomenal growth
Why has Apple experienced phenomenal growth since 2000?
Due to its development of mobile and Wi-Fi devices.
Where does Apple rank in terms of being a large IT company by revenue?
It is the second-largest IT company by revenue
Where does Apple rank in terms of being a large mobile phone manufacturer?
It is the third-largest mobile phone manufacturer
Which brand is the world’s largest music retailer?
Apple through its iTunes store
Where does Apple rank in terms of having a large global brand value?
It is the number one global brand by value
What is Apple’s value?
US$145billion
How many full time employees does Apple have?
98,000
How many retail stores does Apple have?
453
How many countries have Apple stores?
16
What were Apple’s total assets valued at in 2014?
US$207 billion
In which year was Apple the 11th largest TNC globally?
2014
What has caused Apple’s success? (5)
Stylish and well-designed products
Slick marketing
Innovative products
Focus on highly mobile devices which fits their market’s needs.
Selling ancillary products via the internet
In which type of countries is Apple’s market predominantly in?
Richer, developed countries
What percentage of Apple sales were in the USA in 2011?
44%
What is Apple’s average market profile?
Young, wealthy and educated people
What is the average age of Apple consumers?
31
How wealthy is the average Apple buyer?
On average, Apple customers earn 26% more than the national average
What percentage of people that buy Apple products are graduates?
58%
In the past 5 years, where has Apple experienced the most rapid growth?
Outside the USA, especially in the Asia-Pacific region
Where are Apple’s HQ and research & design centres?
On the Apple Campus in Cupertino, California
Where are Apple’s European headquarters?
Cork, Ireland
How many people are employed in Cork’s Mac production line?
4000
What does Apple also have in Cork?
A customer support and online store call centre
Where is Apple’s manufacture mainly outsourced to?
Foxconn, a Taiwanese company
Where does Foxconn have lots of factories?
In China
Does Foxconn subcontract?
Yes
Where are Apple’s main products designed?
Silicon Valley, California
How many data centres does Apple have in the USA?
4
What is a good example of Agglomeration?
The concentration of R&D and data centre locations in Silicon Valley
Why are agglomerations important for high-tech industries?
Information exchange and access to well-qualified expert staff is crucial.
How many retail stores does Apple have in Europe and the Middle East?
110
How many Apple retail stores are in China?
25
Where has Apple increased its market by 600million people?
China
What has forced down production costs?
There was lots of competition for manufacturing contracts.
Where is Foxconn’s main production base?
Shenzen
Why did Foxconn locate in Shenzen?
It was the location of China’s first and most successful Special Economic Zone (SEZ)
What doe SEZ’s offer and why?
Incentives to attract foreign companies
What is Foxconn City?
A business park in Shenzen
Why is Foxconn City dubbed “China’s Silicon Valley”?
It has many factories belonging to well-known high-tech brands
Where do most factory workers live and why?
In the Foxconn City business park because it is self contained with high security and dormitories, shops and cafes.
How much are workers in Foxconn City paid?
US$150 to US$200 per month
Are workers in Foxconn City paid more or less than in other parts of Shenzen and China?
They are paid more than the average minimum wage
How many workers are employed in Foxconn City?
400,000
Where is the only fully Apple-owned manufacturing facility in the world?
Hollyhill, on the north side of Cork
Why did Apple locate in Ireland?
The government has a 12.55 corporation tax which is the second lowest in the EU.
Apple is Cork’s largest what?
Private employer
How many workers work directly on the Mac production line and call centre in Cork?
4000
What has Apple’s presence in Cork done?
Attracted other high-tech firms to the area.
How many jobs have been provided in Cork as a result of Apple’s supply chain and ancillary services?
2500
What has Apple contributed to and expanded in Cork?
Infrastructural improvements
What has contributed to Ireland’s “Celtic Tiger” economy of the 1990s and early 2000s?
The presence of Apple and other high-tech TNCs.
What is a negative consequence of Apple locating in Ireland?
Many of the skilled workers are foreign nationals and so Apple has been accused of not creating sufficient work for the local people.
What percentage of Apple workers in Cork are Irish?
60%
What type of tax has Apple been accused of avoiding?
Corporate tax avoidance
How can Apple pay lower rates of tax?
It can use subsidiary firms in other countries to declare profits.
Who investigated Apple’s tax liabilities?
The US Senate and the EU commission
When were Apple’s tax liabilities investigated?
2014
What was claimed against the Irish government?
They had been too favourable of Apple in terms of tax treatment which the Irish government denied.
What caused tensions between the EU and US?
The EU and USA both claimed that Apple owed them tax on their profits.
How do taxation systems need to be altered as the world becomes more globalised?
They need to be updated to accommodate large TNCs.
Where does Apple get most of its profit from?
Intellectual property, marketing, patenting and branding
What is the problem with Apple’s profit coming from intellectual property, branding, patenting and branding?
It can be funnelled through a maze of subsidiaries.
How many workers in Apple’s Shenzen factory in 2006 were earning $100 a month for 60 hour weeks?
200,000
How much of the Shenzen worker’s wage was taken up by living expenses in 2006?
Half
In 2006, how much did workers at the Shenzen factory earn a month?
$100
In 2006, how many hours a week did workers at the Shenzen factory work?
60
What did media reports say about Apple in 2006
“Sweatshop conditions”
Enforced overtime
What happened to 50 workers at Lianjian Technology?
They were poisoned by a toxic chemical used to clean iPad screens.
What is Lianjian Technology?
A company subcontracted by Foxconn
When were 50 workers poisoned?
2010
What did the 50 workers who were poisoned decide to do?
Sue Apple
Why did the poisoned workers try and sue Apple?
In order to reduce costs, adequate ventilation had not been installed.
How did the poisoned workers settle their case?
Out of court
Why does Foxconn use students and children as workers?
As a part of its objective of maintaining a low-cost and flexible labour force.
Who supported the Foxconn child workers policy?
Provincial authorities
How did the provincial authorities support Foxconn’s child worker policy?
By allowing them to be graded as interns or trainees
How did the provincial authorities support Foxconn’s student worker policy?
By making work there a condition of graduating
When did the Foxconn suicides happen?
2009-10
Why did a worker commit suicide in 2009?
After coming under pressure from a prototype model of the iPhone 4 disappearing.
How many suicides had taken place by the end of 2010?
14
Why did so many suicides occur?
Due to the severe working conditions
What does Apple now have as a result of the suicides of Foxconn workers?
A Supplier Code of Conduct
Why does Foxconn still work with Apple?
It would be too expensive for Apple to change manufacturers.
Where have many environmental criticisms come from?
Greenpeace
What has Greenpeace produced?
A Green Electronics Guide
What does the Green Electronics Guide do?
Rank companies on their environmental performance
What was Apple criticised by Greenpeace for?
Its reliance on non-renewable energy
Use of toxic chemicals and brominated flame retardants
Chines factories discharging pollutants and toxic metals into the water system
Lack of recyclability of Apple products
How did Apple respond to Greenpeace’s criticisms?
It launched a campaign known as Green My Apple
What was the aim of Green My Apple?
To improve its green credentials
How much of Apple’s energy usage is now renewable?
75%
What has Apple invested in to power its data centres?
Solar farms
What has Apple removed from its products in order to be more environmentally friendly?
PVC plastics and brominate chemicals
What was Apple’s position on the Green Electronics ranking in 2006?
11th
What was Apple’s position on the Green Electronics ranking in 2012?
6th
