Apple TNC

• Apple is a US electronic technology corporation with company headquarters based at Apple Park in Cupertino, northern California
• Apple History

  • Began in 1976 in early days of personal computers
  • In 1982 created Macs
  • Since 2000 it has experienced phenomenal growth because of mobile and Wi-Fi development
• In 2019, Apple was the world's largest IT company by revenue, third-largest mobile phone manufacturer and the number one global brand by value (US $234 billion)
• Apple has 137,000 employees and over 510 retail stores in 22 countries
• Factors leading to Apple's success

  • Stylish and well-designed products
  • Slick marketing and branding - generating a growing number of customers with brand loyalty
  • Innovating products
  • Focus on highly mobile devices
  • Selling product and services with ancillary products e.g. music
  • Diversification into new technologies and platforms
• Apple products are designed in Silicon Valley, California, made in mainland China by Foxconn with components sourced from around the world
• Apple expanding activities in the USA

  • headquaters and research and design centre at Apple Park in Cupertino, California
  • large campus and MacPro assembly employs 6000 people in Austin Texas, plans to employ a further 10,000
  • five data centres in the USA: Newark, Santa Clara (California), Reno (Nevada), Prineville (Oregon) and Maiden (North Carolina). Data centre planned for Waukee (Iowa)
• Reseach and Design locations concentrated in Silicon Valley, California is a good example of agglomeration, which is typical of high tech industries where information exchange and access to staff are crucial
• Apple has its European, Middle Eastern and African headquaters in Cor Ireland, where it employs 6000 workers on its iMac production line. Cork is also global transport logistics hub for Apple, organising iPhone and iPad shipments
• Assembly of iPhones and iPads is outsourced to partner companies Foxconn and Pegatron - both Taiwanese. Foxconn is Apple's longest running partner, with a main production based in Foxconn City near Hong Kong
• Of Apples 511 retails stores, over half are in the US, 115 are in Eurpope and the middle East and 42 are in CHina
• Apple's mainstream products are produced in China

  • they can outsource production to established Taiwanese electronics firm such as Foxconn who competed for Apple's manufacturing contract
  • large, young, skilled and non-unionised workforce who will work long hours for low wages
  • Shenxen was China's first SEZ offering incentives for companies
• Apple's Impact on Ireland

  • Apple was lured to Ireland in 1980, at a time of high unemployment, by the government's 12.5% corporation tax, second lowest in the EU
  • Employs 6000 workers at Hollyhill, Cork's largest private employer
  • Enhances Ireland's reputation and its global connectivity, over 100 people work in the logistics team
  • Generated around 3000 jobs in ancillary work
  • Attracted other high-tech firms to the area
  • Apple contributed to other infrastructural improvements within the city
• Apple's Tax Practices

  • Apple uses subsidiary firms in other countries to pay low tax, in 2014 this was criticised by both the US and EU, who both claimed Apple owed them tax
  • In 2016, EU Competition Commissioner concluded Apple had received illegal state aid from Ireland and ordered them to pay €13 billion in unpaid taxes from 2004-2014
  • Expose a flaw in taxation systems, which need to be updated to accomodate large TNCs such as Apple
• Apple's Labour Practices in Foxconn

  • Working conditions = most workers live on site with dorms, shops and cafes. They work around 62 hours a week for $300 a month, half taken up by living expenses - these persist despite Apple's intervention
  • Health and Safety = workers have been exposed to toxic chemicals and not always allowed earplugs and goggles
  • Student and Child Labour = In 2017, student interns were found that have worked excessive hours. Factories in China can employ under 18s, but Apple do not and demand the contractors limit student interns to 10% of workforce
• Apple's Environmental Issues

  • All came as a response to a Greenpeace criticism in 2000s, 'Green my Apple' campaign
  • Uses 100% renewable energy in US facilities
  • Has all PVC plastics and chemicals removes
  • Promotes recycling
  • In 2016, they issued a $1.5 bilion green climate bond
  • Moved from 11th in Greenpeace's rankings in 2006 to 2nd in 2017
• Apple's Trade and Marketing

  • Caught in trade wars between US and China, heavy tariffs on Chinese imports, so Apple has to pay for products
  • Since 2017, fallen in lie with US administration's aim to re-invigorate domestic manufacturing - due to incentives they are investing in US domestic suppliers, pledging to create 20,000 more jobs investing $5 billion
  • Apple's investment in US encouraged by tariff exclusion zones in Austin
  • Has attempted to enter the Indian market, but this has been unsuccessefull
• Apple is demonstrating how it can respond easily to incentives, growing markets, changes in terms of trade and geopolitical developments by redirecting investment in different parts of its operation
• Apple demonstrates how having a well-organised global supply chain reduces cost and insurance profits