Apple’s Social Responsibility in China

Hola Todos!

Recently, I was asked by a journalist about Apple’s corporate social responsibility manufacturing in China.  I posted by full response to his question below.

 

Hello,

My name is Daniel M. Ladik and I am as Associate Professor of Marketing in the Stillman School of Business at Seton Hall University.  Your request was forwarded to me as my main areas of teaching and research expertise include marketing strategy and social media/Web 2.0, as well as, personal selling and sales management.  I blog at www.dignuggetville.com.  I am also an Apple aficionado – see previous Apple comments in Forbes Magazine (click here)

The question you seek has a very simple answer – YES.   Apple has a greater responsibility, compared to many other firms who also manufacture in China and elsewhere around the world because that is what leading firms do. Apple is the most valuable company in the world and with that title should also include providing leadership for other companies to follow.

In comparison to Nike, who for years dodged (or at least attempted to dodge) the foreign manufacturing criticisms by proclaiming “we do not manufacture anything – Nike is just a marketing and design firm,” Apple has been at least significantly more forthright in their efforts to address this issue directly.

First, in the bottom right hand corner of Apple’s home page (apple.com) – clearly displayed – is Apple’s “Supplier Responsibility Code of Conduct Report.”  Not only is the report not buried deep within the Apple web site, the report also significantly documents Apple’s efforts to monitor is suppliers over the years.  Second, this issue is so important that CEO Tim Cook (who by the way, was responsible for honing and cultivating Apple’s supplier network over the years leading to his COO position and eventually CEO job), was in New York City to personally address the issue (see the transcription here).  Can you name one other technology firm that has gone to the lengths that Apple has?  No.

That said, is that enough? NO.  Apple has the ability to apply more leverage over these suppliers for their lack of compliance therefore improving the working conditions at their suppliers – – and I believe they will as per Mr. Cook’s comments.  People have the right to boycott Apple and if they feel that is the right thing to do – by all means – do so.  At the same time, consumers should boycott Sony, Dell, Hewlett-Packard, I.B.M., Motorola, Toshiba and dozens of other major brands Foxconn contract manufactures.  This issue is much bigger than a simple boycott.

In my personal opinion, I feel Apple should once again get back into the manufacturing business or at least, the final assembly business here in the United States (or at least NAFTA and Mexico).  Everything Chinese workers are manually doing in these very labor intensive factories could also be done via robots and humans in US factories.  If Detroit can rebuild itself and its factories like it has over the past 10 to 15 years, the rest of manufacturing, like Apple, could also “get back into the game.” President Obama and Washington could provide the juicy incentives to make this happen.  Why not?  The US economy could depend on it.

If you have any questions about the above comments or would like further detail, please contact me at the email address below.

Best regards,

Dan

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

daniel.ladik@shu.edu

 

iPad 3 or iPad HD Day: More Helium for Apple’s Stock Price & Dr. Dan-o on MSNBC.com

Hola Todos!

Today is a big day for Apple and I am curious to see exactly what they are going to pull out of their hat.  No one is expecting anything mind bending for the new iPad and perhaps a new Apple HD TV box but it always interesting to follow nonetheless.  The Apple 2.0 Blog has a few suggestions for those of us who wish to follow along but who are not in San Francisco at 10AM PST (1PM EST) – click here for suggestions.

Yesterday, I was fortunate to have a chat with a journalist who is associated with MSNBC and the story and my comments could be found here.  For the sake of completeness, I included all of my comments to the journalist below.

Best regards,

Dr. Dan-o

 

Hello Eve,

My name is Daniel M. Ladik and I am as Associate Professor of Marketing in the Stillman School of Business at Seton Hall University.  Your request was forwarded to me as my main areas of teaching and research expertise include marketing strategy and social media/Web 2.0, as well as, personal selling and sales management.  I blog at www.dignuggetville.com.  I am also an Apple aficionado – see previous Apple comments in Forbes Magazine (click here).

The question you ask has a very simple answer – YES and without question, tablets will replace PCs for the normal, everyday use (e.g., email, word processing, powerpoint, web surfing, etc).  In one of his last conference appearances in 2010, former Apple CEO Steve Jobs explicitly stated “Welcome to the Post-PC Era.” On Valentine’s Day 2012 at a conference in New York City, current Apple CEO Tim Cook stated, “iPad sales are currently cannibalizing Mac sales, as well as, sales of all other PCs across the industry.”  Mr. Cook also stated, “I am OK with that as I am never going to tell one of Apple’s product divisions to hold back and make an inferior product.  In addition, I rather we cannibalizing our own sales than have some competitor do it for us.”  (For exact transcription, click here).

Also accelerating the shift to tablets from PCs is the use of tables in the corporate world.  In a January 2012 conference call with investors, analysts, and reporters discussing October, November, and December 2011 sales, CEO Tim Cook said more than 80 percent of Fortune 100 companies were using or testing the iPad, an increase from 65 percent three months earlier. (Reference, click here).

That said, I feel the more interesting question is not IF but rather WHEN is tablet sales going to overtake PC sales?  Some analysts such as Gene Muster of Piper Jaffray estimates sometime in 2017 while other more aggressive predications such as Horace Dediu of Asymco suggests it could happen by Fall 2013.  In my personal opinion, I see it happening sooner rather than later, especially if one combines the personal use, the corporate use, as well as, the iBooks initiative (and e-books in general) explosion with millions and millions of K-12 and universities moving to an all tablet platform for learning delivery.

How valuable is iPad to Apple financially?  iPad is the cornerstone of Apple’s growth for the next 4 to 8 years.  For the months of October, November and December 2011, Apple sold 15 million iPads that accounted for 9.15 billion dollars or 20% of Apple’s revenue for the quarter.  In addition, the other cornerstone is iPhone.  In the same quarter for 2011, Apple sold 13.4 million iPhones.  In early March 2012, CEO Tim Cook struck a deal with China Telecom, China’s No. 3 mobile carrier and No. 1 Wi-Fi and fixed-line provider (total subscribers: 216 million).  China Telecom has 38.7 million 3G subscribers, of which approximately roughly 15 million of whom are “high-end” users who could easily afford an iPhone.  I can easily predict that iPad and iPhone will drive Apple’s stock price north of $600 per share by January 2013 when Apple releases its October, November and December 2012 results fueled by iPad 3 and iPhone 5 sales (reference, click here)

I hope this was helpful for your article.  If you have any questions about the above comments or would like further detail, please let me know OK.

 

Best regards,

Dan

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

daniel.ladik@shu.edu

 

 

 

Steve Jobs Book Summary by Adam Lashinsky

Hola Todos!

It seems if Apple is always in the news but I guess that’s par for the course when it’s the world’s most valuable company and Apple will be releasing the latest version of their iPad on Wednesday (click here for a rumor roundup – I hope its more than 1 iPad).

Malcolm Gladwell did an excellent summary of Walter Isaacson’s book in the New Yorker (click here) previous discussed on DigNuggetville.  Recently, Adam Lashinsky, Sr. Editor at Large of Fortune Magazine, also wrote an excellent book titled “Inside Apple.”  In two recent previews/summaries, Mr. Lashinsky highlights the depth of secrecy Apple keeps inside its corporate walls (click here) and three lessons other companies can learn from Apple (click here).

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

How Twitter Can Change Sports (& Other) Fandom

Hola Todos!

As part of my deep dive into Twitter this year, I’m always on the lookout for interesting “How To” or “What is” or “Insider Tips” articles that accurately describe Twitter.  The other day, one of my MBA students Jon O’Sheal sent me a good one that details how Twitter changed one fan’s means of getting sports info (click here for article).

Although these nine points are applied to sports in this article, one could easily substitute the sports exemplars for any other special topic of interest (e.g., politics, art, cars, social media, etc.,) to gleam a nugget or two.

 

Best regards,

Dr. Dan-o

 

Daniel M. Ladik, PhD

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

 

 

 

 

 

 

 

 

Topic Talk Thursday – The Digital Divide

Hola Todos!

Today’s topic talk is courtesy of Heather Linton, an Instructor of Marketing at Ithaca College (Ithaca, NY), with specific interest in the fields of tourism and digital marketing. When you get a chance, visit Heather’s site  digitaldmo.com or find her on LinkedIn (heather@heatherlinton.com) for more information.  In her topic talk, Heather discusses the digital divide and its impact this divide has on society.

Heather, the floor is yours….

 

Hello everyone,

While browsing Ted.com looking for interesting examples for my marketing classes, I came across a fascinating presentation by Richard Wilkinson.  (http://www.ted.com/talks/lang/en/richard_wilkinson.html). He theorizes that within each country, income gaps (differences between the highest and lowest relative income in a society) determine the extent of many social issues. The average well being of our societies is no longer dependent on our national income; what matters is the differences between individuals within each society. The chart below shows that countries that are more equal in terms of income (like Japan and Sweden) have much lower rates of health and social problems (list on the left). Countries that are less equal in terms of income (like the USA, Portugal, and the UK) have higher rates of health and social problems. I highly recommend watching the 15-minute video to view his full talk, but I want to talk about a different issue here.

 

In my classes we talk briefly about the digital divide, and I began to wonder what sort of ethical impact this has on society. Since I am one of the lucky ones with very good internet access, I began researching.

First of all, in case you’re not familiar with the digital divide, it is broadly defined as “the gap between those people who have internet access and those who do not” (www.dictionary.reference.com). The PewResearchCenter (http://pewinternet.org/topics/Digital-Divide.aspx) furthers this definition, stating “Internet access is best understood as a spectrum, ranging from people who have never been online, to those who have dial-up or sporadic access, to those who have broadband at home and at work.” This could also encompass entire communities, not just individuals.

So why aren’t people online? Another Ted talk by Aleph Molinari (founder of Mexican company RIA) (http://www.ted.com/talks/lang/en/aleph_molinari_let_s_bridge_the_digital_divide.html) gives a good 10-minute overview that is worth a watch. He brings up the point that the digital divide is a new type of illiteracy. His reasons for the digital divide are as follows:

  1. Can’t afford the technology
  2. Don’t know how to use the technology
  3. Don’t understand the benefits that derive from technology

The world population is nearly 7 billion, but only about 2 billion are digitally included – about 30% of the population. This means that the remaining 70% of the world, close to 5 billion people, do not have access to computers or the internet. In the map below we can see that most people with internet access are in North America and Europe, and most of the rest of the world isn’t able to broadcast themselves and share ideas and connect with others in a way that you and I take for granted.

Map from http://www.chrisharrison.net/index.php/Visualizations/InternetMap

Organizations like One Laptop per Child (one.laptop.org) and RIA (http://www.ria.org.mx/site/) have similar missions of providing internet access, training, and information to those on the lowest end of the digital divide around the world, although their strategies to reach those goals vary.

Molinari also theorizes that although our world is going through a digital revolution, 70% of global citizens aren’t able to be a part of this. They won’t be able to compete in labor markets as we move towards a more digitally based workforce. They will be less informed as information moves online, and less inspired and responsible. He argues that internet should be a right, not a luxury. It allows us to connect, it empowers us, and is a tool for change.

However, we also need to consider users domestically as well. While 93% of teens were online as of May 2010 (most recent Pew data available), only 42% of adults age 65 and older used the internet.

Chart from http://pewinternet.org/Infographics/2010/Internet-acess-by-age-group-over-time-Update.aspx

 

Think of all the information that adults age 65 and older would benefit from being able to find online. Healthcare and diet resources, part-time or home-based jobs, social connections for those who find it difficult to leave their homes, better relationships with their families who are already sharing their lives online, etc. Why aren’t they online? I believe for the reasons Molinari notes above – they can’t afford it, they don’t know how to use it, or they just don’t know why they should be online.

This also brings up the issue of high-speed internet being available to everyone. Many people in rural areas can’t get cable internet or DSL, and are stuck on dial-up, which certainly doesn’t provide full internet capabilities, or satellite, which is expensive and also challenging to use. This means many things, like individuals can’t accurately research purchasing or life choice options online. Rural healthcare facilities, even in the US, may not have access to information networks that would greatly benefit their staff and patients. The list goes on.

What other issues do you see related to the digital divide? Some governmental groups and NGOs are looking for solutions, but what do you think? How can you take action and reach out to your friends or family who aren’t online and help them get there?

 

Best regards,

Heather Linton,

Instructor of Marketing at Ithaca College (Ithaca, NY)

Founder, digitaldmo.com