Will the Current Bad PR for Apple Come to Anything?

The topic’s a little late, but there didn’t seem to be an earlier thread on it so…

Apple’s currently facing an amount of bad PR that was triggered by a New York Times article last month on working conditions at their suppliers’ factories in China. Surprisingly, (I mean, that working conditions in China are bad shouldn’t exactly come as a shock) the backlash seems to be showing some traction. In addition to the usual slew of articles on the issue, an online petition (I know, I know) with 250,000 signatures asking for change was presented to Apple and there have been some live protests outside Apple stores. Apple has put up a page on “Supplier Responsibility” in response.

Personally, I was surprised at how good the NYT article was. I was familiar with the general issues involved, but I thought it made an interesting argument that Apple is not just taking advantage of the poor working conditions abroad, it is a driving force behind them. It argues that it is essentially impossible for a Chinese company to make a profit as a supplier for Apple without cutting corners on worker safety and that this is more or less known to Apple. It also argues that Apple’s claim to be working for “supplier responsibility” is a smokescreen to provide cover for the company; the authors point out that Apple rarely punishes its suppliers for violations and that it’s approach of “these things take time” is jarring compared to the immediate compliance they demand when it comes to production targets and quality.

Now, the above shouldn’t come as all that much of a shock. And Apple isn’t alone in these practices; they’re common to the consumer electronics industry. But there are a few reasons why they seem to be particularly vulnerable to criticism:

  1. This backlash comes in the wake of their widely-reported record profits.
  2. Unlike their competitors who often have to sell their products with only a slim margin, Apple makes a healthy $1-200 profit on each iPhone and iPad sold. With labor costs of only about $10 per unit, they aren’t able to make same argument that they’d have to raise prices if working conditions improved.
  3. Apple’s target demographic seems to care more about social issues and the company tries to put forward a public image to match.

Given how little it would cost to make a substantive improvement and the PR benefits that the company would accrue, I see the potential for Apple to make a few changes, especially now that Jobs is gone.

On the other hand… the iPad 3 is about to come out and we love our shiny new toys a lot more than we care about working conditions abroad. So Apple can probably wait this all out and hope we just forget.

(Personally, I’m a fairly libertarian, pro-globalization kind of guy. The thing that rubs wrong the most here is Apple’s attempting to have their cake and eat it, too. You either get to portray yourself as a good corporate citizen trying to improve the world or you get to take advantage of foreign sweatshops; not both.)

I don’t think it will affect their image much in the end. A few crunchy granola types will look elsewhere for gadgets but then crunchy granola types aren’t really their audience, it is more the faux crunchy granola type and mostly people that love the shiny stuff that Apple does so well.

The biggest thing is that Apple is really not worse then any major electronics supplier and so the bad press just won’t hurt them that much.

To be fair, it was Mike Daisey and his “Agony & Ecstacy of Steve Jobs” one-man show that kicked this off.

Maybe I don’t understand the issue, but the problem is at Foxconn, who manufactures products for just about every electronic item we use, not just Apple, right? If a socially-conscious computer user wanted to migrate from Apple, where would they switch to?

I’d hope this casts so bright a light on conditions that practices get better, but this is a systemic problem in China, not limited to Foxconn or Shenzen. To hear people bitch about paying higher taxes so our own poor people can have food stamps or health care in our own country, I don’t see many of these folks signing up for paying twice as much for their computer so that the Chinese have a better standard of living. I also don’t see American corporations saying, “Y’know, let’s not mark these up and pass the savings on to the Chinese worker.” Even if our corporations did that, who’s to say the manufacturer wouldn’t pocket that themselves. Remember, these are the people who prep the factories when the inspections come to make everything look all nice and dandy.

Anyway, This American Life had a really good point/counterpoint perspective on the subject.

I think this sentiment explains why there is little chance for change. But I think it’s based on a widely believed false premise (I read the same “twice the cost” hyperbole in a NYT column). Improving working conditions would not result in massive increases to the cost of the goods. Labor costs make up only a tiny fraction of the cost. It makes the whole thing seem kind of petty, frankly. Things like pushing for Apple to move its operations to the US or implement American factory standards in China are unrealistic. But getting companies to actually enforce the maximum 60 hours a week policy that Apple already claims they mandate? It’s a different level.

And while I understand the point that you and What Exit? made about Apple being just one of many, I think a positive image is far more important to Apple than it is to their competitors. That’s one of the reasons why they get to charge such an incredible premium for the product, the emotional attachment that many feel for the company (for whatever reason). I don’t know anyone who actually cares about HP’s policies, for example.

What I found interesting in the article was that I had a mental image of these factories, and I generally figured things were the way they were because the Chinese companies were squeezing every drop they could out of their workers. I guess it was naive of me, but I never took that to the next level and realized that Apple was squeezing every drop they could out of their suppliers. You might be right, that nothing would change even if that wasn’t the case.

But I think Apple could probably do a fair job policing these things if they cared. Just like the lines of Chinese lining up to get a job at Foxconn, there are Chinese suppliers lining up to get a contract from Apple, after all. Even if Apple couldn’t make a difference, from a PR viewpoint it looks better if they could show that they were actually trying.

From electronic component industry news that I read, I’m getting the impression that Foxconn is having to improve employee pay and conditions. I’m sure that most of this is due to the employees rebelling, but customer pressure is probably part of it too.

Are Chinese Workers Really Defenseless? Foxconn has doubled their wages.

Of course, that has lead to Foxconn accelerating their attempt to replace workers with robots.

Either way, Apple will take credit for an employee-friendly manufacturing process. Either they are being paid more, or they are being freed from boring repetitive work.

This is why I think Apple will not feel much backlash.

If there were a legitimate alternative technology supplier that didn’t use the same sort of manufacturing, you might see some movement on this. But, essentially, Apple is the target of this backlash because they’re hot right now and people love writing stories about Apple.

Of course, I tend to think that image isn’t the major factor in Apple’s recent success. My reasoning is that Apple’s image hasn’t really changed since the late 80s, but their success rate certainly has. If I’m wrong, and people really are buying Apple devices in droves because they get a fuzzy feeling from thinking that the company is all sunshine and puppy dogs, then this sort of story, showing that they’re a profit-driven business like any other, might take some of that sheen off of them.

Well, as a part-owner (0.00000107%), I see no need for concern.

Jobs has gone to live on the comet. As a result, Apple products will never sell as well as they did before. The lies spread by their competitors, who steal all their ideas from Apple, have nothing to do with it.

I can’t see this movement coming to much. It’s not like the Android phones are made anyplace different, right? I’d like see the Hollywood crowd giving up their iPhones for this cause. Not. happening.

“Hollywood crowd”?

Did I miss something?

Indeed. Google, Samsung, Microsoft, Nokia, HTC, and countless other companies have never had a single innovative bone in their body, and have merely ridden Apple’s coattails to success.

Snark detected.
Deflectors activated.

Hardware wise Apple has never done anything special. Their main strength lies with software, things like ITune store and their user interface in general. I remember when Apple fanboys used to cry how good Mac was because they used IBM CPU, but now they changed to Intel. If you do a direct comparison between Mac desktop/laptop you soon realize they charge around 20% more for the same hardware. Apple have so much momentum on their side right now it’s hard to imagine anything will change anytime soon. For example if wanted a mp3 player and goes to a store to buy it and I ask for anything else beside Ipod or Sony the people look at you funny. Somehow the Apple brand have achieve cultish status and it take more then a bit of bad PR for people to stop buying their stuff.

Being an anti-IP kind of guy, closed hardware and closed source really irritate me. But not so much that I don’t own an iPod. Share price keeps climing, I’ve heard.

I’ve never really associated Apple with socially-aware, deep and edgy complainer types. I’ve associated Apple with non-savvy middle class hipsters. Their share price is rising, btw—heard it on NPR last night. Savvy computer users, in my well-researched stereotype, use Windows (usually gamers) and Linux.

Did I mention that I heard the share price of Apple is still climbing?

Apple has always been about changing the world. For rich people, that is. And I use “rich” here in a global sense, meaning pretty much anyone living in a developed country.

There is a story in the paper today about how a 3rd party audit of the Foxconn factory today.

As strong a sell signal as any. Buy low, sell high. :slight_smile:

The first part of the sentence seems to have nothing to do with the second part of the sentence.

IMO you cannot waive off your sins by claiming ‘supplier responsibility’ if you do not actively make sure all your suppliers are playing on a level playing field.

If you reward suppliers such that the terrbile ones get rewarded then YOU are responsible as well as the supplier. If anything, even more so.

Have you wandered around a university computer science department, recently? Or a computer science conference? In my experience, a very high percentage of the faculty and grad students (possibly even a majority) use Macs these days.

Yeah I’m not unfamiliar with the college-student Apple user. More than a few Racketeers use Macs (which is the extent to which I rub shoulders with computer science, being a hobbyist and not a professional). I think that they’re transfers from Linux, though, since whatever version of the OS that’s being pushed is Unix-y.