Friday, 12 July 2013

Corporate affairs

See also: List of mergers and acquisitions by Apple, Braeburn Capital, and FileMaker Inc.

During the Mac's early history Apple generally refused to adopt prevailing industry standards for hardware, instead creating their own. This trend was largely reversed in the late 1990s beginning with Apple's adoption of the PCI bus in the 7500/8500/9500 Power Macs. Apple has since adopted USB, AGP, HyperTransport, Wi-Fi, and other industry standards in its computers and was in some cases a leader in the adoption of standards such as USB. FireWire is an Apple-originated standard that has seen widespread industry adoption after it was standardized as IEEE 1394.

Ever since the first Apple Store opened, Apple has sold third-party accessories. For instance, at one point Nikon and Canon digital cameras were sold inside the store. Adobe, one of Apple's oldest software partners, also sells its Mac-compatible software, as does Microsoft, who sells Microsoft Office for the Mac. Books from John Wiley & Sons, who publishes the For Dummies series of instructional books, are a notable exception, however. The publisher's line of books were banned from Apple Stores in 2005 because Steve Jobs disagreed with their decision to publish an unauthorized Jobs biography, iCon. After the launch of the iBookstore, Apple stopped selling physical books, both online and at the Apple Retail Stores.

Headquarters Main article: Apple Campus Company headquarters on Infinite Loop in Cupertino, California

Apple Inc.'s world corporate headquarters are located in the middle of Silicon Valley, at 1–6 Infinite Loop, Cupertino, California. This Apple campus has six buildings that total 850,000 square feet (79,000 m2) and was built in 1993 by Sobrato Development Cos.

In 2006, Apple announced its intention to build a second campus on 50 acres (200,000 m2) assembled from various contiguous plots (east of N Wolfe Road between Pruneridge Avenue and Vallco Parkway). Later acquisitions increased this to 175 acres. The new campus, also in Cupertino, will be about 1 mile (1.6 km) east of the current campus. The new campus building will be designed by Norman Foster.

On June 7, 2011, Steve Jobs gave a presentation to Cupertino City Council, detailing the architectural design of the new building and its environs. The new campus is planned to house up to 13,000 employees in one central four-storied circular building (with a café for 3,000 sitting people integrated) surrounded by extensive landscape (with parking mainly underground and the rest centralized in a parking structure). There will be additional buildings such as an auditorium, R&D facilities, a fitness center and a dedicated generating plant as primary source of electricity (powered by natural gas and other more environmentally sound means).

Apple's headquarters for Europe, the Middle East and Africa (EMEA) are located in Cork in the south of Ireland. The facility, which opened in 1980, was Apple's first location outside of the United States. Apple Sales International, which deals with all of Apple's international sales outside of the USA, is located at Apple's campus in Cork along with Apple Distribution International, which similarly deals with Apple's international distribution network.

On April 20, 2012, Apple announced the addition of 500 new jobs to its European headquarters. This will bring the total workforce from around 2,800 to 3,300 employees. The company will build a new office block on its Hollyhill Campus to accommodate the additional staff.

Corporate culture

Apple was one of several highly successful companies founded in the 1970s that bucked the traditional notions of what a corporate culture should look like in organizational hierarchy (flat versus tall, casual versus formal attire, etc.). Other highly successful firms with similar cultural aspects from the same period include Southwest Airlines and Microsoft. Originally, the company stood in opposition to staid competitors like IBM by default, thanks to the influence of its founders; Steve Jobs often walked around the office barefoot even after Apple was a Fortune 500 company. By the time of the "1984" TV ad, this trait had become a key way the company attempted to differentiate itself from its competitors. According to a 2011 report in Fortune, this has resulted in a corporate culture more akin to a startup rather than a multinational corporation.

As the company has grown and been led by a series of chief executives, each with his own idea of what Apple should be, some of its original character has arguably been lost, but Apple still has a reputation for fostering individuality and excellence that reliably draws talented people into its employ. This was especially after Jobs' return. To recognize the best of its employees, Apple created the Apple Fellows program, awarding individuals who made extraordinary technical or leadership contributions to personal computing while at the company. The Apple Fellowship has so far been awarded to a few individuals including Bill Atkinson, Steve Capps, Rod Holt, Alan Kay, Guy Kawasaki, Al Alcorn, Don Norman, Rich Page, and Steve Wozniak.

Apple is also known for strictly enforcing accountability. Each project has a "directly responsible individual," or "DRI" in Apple jargon. As an example, when iOS senior vice president Scott Forstall refused to sign Apple's official apology for numerous errors in the redesigned Maps app, he was forced to resign.

Numerous employees of Apple have cited that projects without Jobs' involvement often took longer than projects with his involvement.

At Apple, employees are specialists who are not exposed to functions outside their area of expertise. Jobs saw this as a means of having best-in-class employees in every role. For instance, Ron Johnson who was Senior Vice President of Retail Operations until November 1, 2011, was responsible for site selection, in-store service, and store layout, yet he had no control of the inventory in his stores (which is done company wide by then-COO and now CEO Tim Cook who has a background in supply-chain management). This is the opposite of General Electric's corporate culture which has created well-rounded managers.

Under the leadership of Tim Cook who joined the company in 1998 and ascended to his present position as CEO, Apple has developed an extremely efficient and effective supply chain which has been ranked as the world's best for the four years 2007–2010. The company's manufacturing, procurement and logistics enables it to execute massive product launches without having to maintain large, profit-sapping inventories; Apple's profit margins have been 40 percent compared with 10–20 percent for most other hardware companies in 2011. Cook's catchphrase to describe his focus on the company's operational edge is “Nobody wants to buy sour milk”.

The company previously advertised its products as being made in America up to the late 1990s, however as a result of outsourcing initiatives in the 2000s almost all of its manufacturing is now done abroad. According to a report by the New York Times, Apple insiders "believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products".

Unlike other major US companies, Apple has a relatively simple compensation policy for executives, which does not include perks that other CEOs enjoy such as country club fees and private use of company aircraft. The company usually grants stock options to executives every other year.

Litigation Main article: Apple Inc. litigation

Apple has been a participant in various legal proceedings and claims since it began operation and, like its competitors and peers, engages in litigation (trying legal cases before the courts) in its normal course of business for a variety of reasons. In particular, Apple is known for and promotes itself as actively and aggressively enforcing its intellectual property interests.

Some examples include Apple v. Samsung, Apple v. Microsoft, Motorola v. Apple, Apple Corps v. Apple Computer.


In its fiscal year ending in September 2011, Apple Inc. reported a total of $108 billion in annual revenues – a significant increase from its 2010 revenues of $65 billion – and nearly $82 billion in cash reserves. Apple achieved these results while losing market share in certain product categories. On March 19, 2012, Apple announced plans for a $2.65-per-share dividend beginning in fourth quarter of 2012, per approval by their board of directors.

On September 2012, Apple reached a record share price of more than $705 and closed at above 700 With 936,596,000 outstanding shares (as of June 30, 2012), it had a market capitalization of about $660 billion. At the time, this was the highest nominal market capitalization ever reached by a publicly traded company, surpassing a record set by Microsoft in 1999.

Environmental record

Greenpeace has campaigned against Apple because of various environmental issues, including a global end-of-life take-back plan, non-recyclable hardware components and toxins within iPhone hardware. Since 2003 Greenpeace has campaigned against Apple's use of particular chemicals in its products, more specifically, the inclusion of PVC and BFRs in their devices. On May 2, 2007, Steve Jobs released a report announcing plans to eliminate PVC and BFRs by the end of 2008. Apple has since eliminated PVC and BFRs from its product range, becoming the first laptopmaker to do so.

In the first edition of the Greenpeace 'Green Electronics Guide', released in August 2006, Apple only scored 2.7/10.

The Environmental Protection Agency rates Apple highest amongst producers of notebooks, and fairly well compared to producers of desktop computers and LCD displays.

In June 2007, Apple upgraded the MacBook Pro, replacing cold cathode fluorescent lamp (CCFL) backlit LCD displays with mercury-free LED backlit LCD displays and arsenic-free glass, and has since done this for all notebooks. Apple has also left out BFRs and PVCs in various internal components. Apple offers information about emissions, materials, and electrical usage concerning each product.

In June 2009, Apple's iPhone 3GS was free of PVC, arsenic, BFRs and had an efficient power adapter.

In October 2009, Apple upgraded the iMac and MacBook, replacing the cold cathode fluorescent lamp (CCFL) backlit LCD displays with mercury-free LED backlit LCD displays and arsenic-free glass. This means all Apple computers have mercury free LED backlit displays, arsenic-free glass and are without PVC cables. All Apple computers also have EPEAT Gold status.

In 2010, Climate Counts, a nonprofit organization dedicated to directing consumers toward the greenest companies, gave Apple a score of 52 points out of a possible 100, which puts Apple in their top category "Striding". This was an increase from May 2008, when Climate Counts only gave Apple 11 points out of 100, which placed the company last among electronics companies, at which time Climate Counts also labeled Apple with a "stuck icon", adding that Apple at the time was "a choice to avoid for the climate conscious consumer".

In October 2011, Chinese authorities ordered an Apple supplier to close part of its plant in Suzhou after residents living nearby raised significant environmental concerns.

In November 2011, Apple featured in Greenpeace's Guide to Greener Electronics, which ranks electronics manufacturers on sustainability, climate and energy policy, and how "green" their products are. The company ranked 4th out of 15 electronics companies (moving up five places from the previous year) with a score of 4.6/10 down from 4.9. Greenpeace praises Apple's sustainability, noting that the company exceeded its 70% global recycling goal in 2010. It continues to score well on the products rating with all Apple products now being free of PVC vinyl plastic and brominated flame retardants. However, the guide criticizes Apple on the Energy criteria for not seeking external verification of its greenhouse gas emissions data and for not setting out any targets to reduce emissions. In January 2012, Apple announced plans and requested that their cable maker Volex begin producing halogen-free USB and power cables.

In June 2012, Apple Inc. withdrew its products from the Electronic Product Environmental Assessment Tool (EPEAT) certification system, but reversed this decision in July.

Labor practices Further information: Criticism of Apple Inc.#Labor practices

In 2006, the Mail on Sunday reported on the working conditions that existed at factories in China where the contract manufacturers Foxconn and Inventec produced the iPod. The article stated that one complex of factories that assembles the iPod (among other items) had over 200,000 workers that lived and worked in the factory, with employees regularly working more than 60 hours per week. The article also reported that workers made around $100 per month and were required to live pay for rent and food from the company, which generally amounted to a little over half of workers' earnings.

Apple immediately launched an investigation and worked with their manufacturers to ensure acceptable working conditions. In 2007, Apple started yearly audits of all its suppliers regarding worker's rights, slowly raising standards and pruning suppliers that did not comply. Yearly progress reports have been published since 2008. In 2010, workers in China planned to sue iPhone contractors over poisoning by a cleaner used to clean LCD screens. One worker claimed that he and his coworkers had not been informed of possible occupational illnesses. After a spate of suicides in a Foxconn facility in China making iPads and iPhones, albeit at a lower rate than in China as a whole, workers were forced to sign a legally binding document guaranteeing that they would not kill themselves.

In 2011 Apple admitted that its suppliers' child labor practices in China had worsened.

Workers in factories producing Apple products have also been exposed to n-hexane, a neurotoxin that is a cheaper alternative than alcohol for cleaning the products.

Tax practices Further information: Criticism of Apple Inc.#Tax practices Global Taxes Paid by ASI, 2009-2011

Apple created subsidiaries in low-tax places such as Ireland, the Netherlands, Luxembourg and the British Virgin Islands to cut the taxes it pays around the world. According to the New York Times, in the 1980s Apple was among the first tech companies to designate overseas salespeople in high-tax countries in a manner that allowed the company to sell on behalf of low-tax subsidiaries on other continents, sidestepping income taxes. In the late 1980s Apple was a pioneer of an accounting technique known as the "Double Irish With a Dutch Sandwich," which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean.

British Conservative Party Member of Parliament Charlie Elphicke published research on October 30, 2012, which showed that some multinational companies, including Apple Inc., were making billions of pounds of profit in the UK, but were paying an effective tax rate to the UK Treasury of only 3 percent, well below standard corporation tax. He followed this research by calling on the Chancellor of the Exchequer George Osborne to force these multinationals, which also included Google and Coca-Cola, to state the effective rate of tax they pay on their UK revenues. Elphicke also said that government contracts should be withheld from multinationals who do not pay their fair share of UK tax.

Charitable causes

As of 2012, Apple is listed as a partner of the Product RED campaign, together with other brands such as Nike, Girl, American Express and Converse. The campaign's mission is to prevent the transmission of HIV from mother to child by 2015 (its byline is "Fighting For An AIDS Free Generation").

In November 2012, Apple donated $2.5 million dollars to the American Red Cross to aid relief efforts after Hurricane Sandy.

No comments:

Post a Comment