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The Fair Labor Association released its report on Apple’s Foxconn factory audit today, after a months-long wait since Apple joined the FLA in January.
“The findings of FLA’s nearly month-long investigation revealed serious and pressing noncompliances with FLA’s Workplace Code of Conduct,1 as well as Chinese labor law,” said the FLA in its report.
According to the report, the association spent over 3,000 staff hours inside Foxconn’s Guanlan, Longhua, and Chengdu factories, observing labor conditions, as well as chewing through policies and records. The staff also anonymously surveyed over 35,000 Foxconn employees about their working conditions.
Apple made the decision to join soon after reports about poor working conditions in its Foxconn factory emerged. The move was intended to curb criticism and add a more transparency to Apple’s supplier network, which has traditionally been veiled. Counts of long hours, very low wages, and child labor have been among some of the complaints against Apple, which chief executive Tim Cook says he greatly wants to reduce.
“If we find a supplier that intentionally hires under-aged labor, it’s a firing offense,” he said at the Goldman Sachs technology conference in February. “We don’t let anyone cut corners on safety.”
The company promised to publish audits performed by the Fair Labor Association to its website, but some people are still not convinced. SumOfUs, an activist group that has been following Apple’s Foxconn debacle from the beginning, believes joining the FLA is really just a public relations move. Members of the FLA are, in fact, paying members, and thus the objectivity of the FLA’s reports is blurry. SumOfUS doesn’t believe the FLA will whitewash the reports, however, saying:
“A critical report from the FLA will not, in and of itself, constitute proof that a new day is dawning in Apple’s supply chain. It will only be proof that the FLA and Apple are smart enough to understand that no one, at this point, is going to be fooled by a whitewash.”
This is a developing story, refresh the page for updates. We have reached out to the FLA and Apple and will update this post upon hearing back.
Filed under: VentureBeat
Apple is holding a conference call bright and early Monday morning to announce plans for its large cash balance. The company is sitting on more than $98 billion dollars in cash, and investors are getting increasingly antsy and clamoring for a payout.
Tim Cook and Apple’s chief financial officer Peter Oppenheimer will be hosting the call, which will take place at 9am Eastern time. They will only discuss the cash balance, nothing else. In addition to the call-in number, a live audio stream of the call will be available for all computers or mobile devices running QuickTime 6.
At the Goldman Sachs Technology and Internet Conference in February, Apple CEO Tim Cook addressed the very expensive elephant in the room, saying “I only ask for a bit of patience so we can do this in a deliberate way and do it in a way that’s best for shareholders.”
“We’re judicious, we’re deliberate, we spend our money like its our last penny … We’re not going to go have a toga party or do something outlandish,” he added.
When a company is sitting on a huge pile of cash, as Apple is, it is expected to shell out a dividend to investors and to spend money on things that will make it even more money. Cook said that so far, the company has spent billions of dollars on its supply chain, intellectual property, acquisitions, retail, and the Apple infrastructure.
Filed under: VentureBeat
At the Goldman Sachs Technology and Internet Conference Tuesday, CEO Tim Cook was asked why the company has not taken the usual moves of buying back stock or issuing a dividend to shareholders. Investors, while happy with the epic stock price, are eager for a payout.
Cook acknowledged that deciding how to best spend that money is a major topic being discussed within Apple.
“I only ask for a bit of patience so we can do this in a deliberate way and do it in a way that’s best for shareholders,” said Cook. “We’re judicious, we’re deliberate, we spend our money like its our last penny … We’re not going to go have a toga party or do something outlandish.”
When a company is sitting on a huge pile of cash, as Apple is, it is expected to shell out a dividend to investors and to spend money on things that will make it even more money. Cook said that so far, the company has spent billions of dollars on its supply chain, intellectual property, acquisitions, retail, and the Apple infrastructure. He acknowledged that those big dollar items still aren’t making a big of a dent.
Cook said that since becoming CEO, he has adhered to the traditional Apple approach of not simply spending for the sake of spending, but said that he is not religious about holding on to the money.
As that pile approaches $100 billion, however, investors may start to become more insistent that Apple do something with it.
Apple stock closed at $509 a share on Tuesday.
Image via Waegook-Travel
Filed under: VentureBeat
Apple CEO Tim Cook took the stage today at the Goldman Sachs Technology & Internet Conference in San Francisco to talk about Apple’s unbelievable first quarter, as well as the company’s outlook going forward. It’s been hard to avoid the headlines: Apple is red hot right now, as MG recently pointed out that Apple’s $13.1 billion profits in Q1 was equal to the company’s revenues in Q4 2010. One year and one quarter later, and Apple is growing like it’s on steroids. Throw in the fact that Apple now has $97.6 billion in cash and equivalents, and the overall picture is fairly jaw-dropping.
Or, perhaps what’s even more anxiety-producing, at least for Apple’s competitors, is that Tim sat in conversation today and almost sounded shocked by his own words — specifically over how much opportunity he sees for Apple in developing markets. The mobile device market is expected to grow to 1 billion units by 2015, with 25 percent of that share coming from China and Brazil alone. Cook stressed that those two markets in particular have been (and will continue to be) critical for Apple moving forward.
Cook said that a halo effect was created by the iPod for Mac sales in developed markets, but that it wasn’t nearly as effective in developing markets like Eastern Europe, the Middle East, Latin America, Asia, and so on, largely because international users were already getting music from their phone. But, with the launch of the iPhone, Apple was “introduced to hundreds of millions of people who had never met Apple before.”
If one takes China as an example, Cook said, Mac sales grew over 100 percent year-over-year. While objectively that may not seem like much, the entire market itself only grew 10 percent year-over-year. Not only that, but a few years China was “only” producing sales in the hundreds of millions for Apple, whereas last year, sales in China had grown to $13 billion. Cook said that this, among other things, is just further evidence of the explosive potential of Asian markets, specifically China.
“If i look back at 2007,” Cook reiterated, for greater China, Asia, India, Latin America, the Middle East [the developing world], revenues then sat at $1.4 billion, whereas Apple’s share of that developing market ballooned to $22 billion in revenues last year.
“All that being said, we’re only on the surface.”
Tim Cook, Apple’s new chief executive officer, gave a small State of the Apple today, touching on the recent poor working conditions accusations, what the iPhone has done for Apple, and why cheap tablets aren’t worth it.
When is Apple not in the news, on people’s tongues, and below their fingers? The chief executive, who recently announced a net profit of $13.06 billion for the fourth quarter of 2011, chatted about the company’s growth at the Goldman Sachs Technology and Internet Conference today. The conversation started with the accusations that Apple has kept poor working conditions for its assembly line workers.
“No one in our industry is doing more to improve working conditions than Apple,” said Cook at the conference.
Recently, dozens of workers at manufacturing company Foxconn, threatened a mass suicide based on payments they believed they were owed. This caused a spin off look into factory working conditions, including hours worked, and payments received. Apple’s workers were given the spotlight, and in reaction, the company announced Monday that it would look further into Foxconn’s operations.
Cook explained that transparency is becoming a huge issue for Apple, which is now reporting monthly audits of its manufacturing teams to its website for public viewing. These audits will ensure that child labor is not present in Apple’s supply chain, which Cook says is “abhorrent,” and “extremely rare in our supply chain.”
“If we find a supplier that intentionally hires under-aged labor, it’s a firing offense,” he said. “We don’t let anyone cut corners on safety.”
Conditions 100 percent perfect for Apple, however, though its goal is to get there. The company has capped its hours per week at 60 hours, and found that a survey of 500,000 employees only came back 84 percent compliant. That is, 16 percent of its employees are still being overworked. But Cook assured that he and his team are working to get all employees up to that 60-hour mark. The monthly reports will help keep Apple honest, but these labor issues have been going on for over four years, according to an anonymous source of the New York Times’.
Apple and China
China, where many of Apple’s iPhone and other manufacturing operations take place, is actually driving much of smartphone sales overall. According to Cook, 25 percent of the expected $2 billion smartphone market comes directly form China and Brazil. Apple says is it focused on the Chinese market and has had particular success there for its iPhone. In previous years, the company took in a few hundred million dollars from iPhone revenue in China, to $13 billion last year.
But in order to reach more people, you have to make the iPhone more affordable for everyone, right? Cook doesn’t believe so. In the same vein of Steve Jobs, Cook believes the product is worth the price and people will be unhappy with a device that has been pared down to fit into an economic mold, including going to a prepaid model.
“I don’t really subscribe to the premiss that a prepaid market is a prepaid market is a prepaid market,” said Cook, “[Post-paid] is great for the customer because they get the phone at a lower price, and it’s great for the carrier because they get to lock in the customer.”
With the iPhone, Cook explained, China found postpaid plans to be “amazing” and were happy to switch for the product.
The iPhone and how it made Apple a global household name
When the iPod originally came out, it brought with it the music store to the Mac, and soon later to the Windows PC. After its introduction to the U.S. market, suddenly people started recognizing the Mac more. It created a halo around the computer, and helped push its name out to the masses because of the association with this cool, new MP3 player that everyone wanted.
The iPhone is doing the same, but not just for the Mac. Cook credits it with taking Apple global.
This story is developing, refresh to see updates.
Filed under: VentureBeat
CEO Tim Cook described Apple’s conquest of emerging markets today at the Goldman Sachs Technology and Internet Conference. He said “In 2007, and we didn’t launch the iPhone outside the U.S. until 2008, Apple’s revenue combined from greater China and several other parts of asia, India, Eastern Europe, the Middle East, Africa, and Latin America was $1.4 billion. Revenue for that group of countries last year was $22 billion. We’re only on the surface.”
Cook explained that the iPod didn’t take off as quickly in the developing world “because people were already getting music from their phones. But the world changed for us with iPhone. It introduced our brand to people who had never met Apple before.”
“The iPhone is creating a halo for the Macintosh, and for iPads. We see the synergistic effects of the markets not only in the developed markets, but in the emerging markets.” Next, Apple will focus on Brazil, Russia, and China, where Cook said Apple’s sales were $13 billion last year.
Cook also mentioned his belief that the tablet market will soon surpass the PC market. Regarding the iPad, “55 million units shipped is something no one would have guessed. It took us 22 years to sell 55 million Macs, it took 5 years to sell 55 million iPods, 3 years to sell that many iPhones. It’s on a trajectory that’s off the charts.” Check out MG Siegler’s roundup of Apple’s jaw-dropping Q1 2012 numbers for more the rise of the iPad.
In his final statement, Cook talked about his role sheparding Apple as the successor to Steve Jobs, “I’m not going to witness or permit the slow undoing of it. Steve grilled into us over the years that the company should revolve around great products and that we should stay extremely focused on a few things…and only go into markets where we can create a significant contribution to society, not just sell a lot of units.”
“We’re always focused on the future. We don’t sit and think about how great things were yesterday.”
[Image Credit: MIT]
Apple’s chief executive Tim Cook is speaking at Goldman Sachs’ Technology Conference today. The presentation is being broadcast via QuickTime on Apple’s Investor website.