Apple Inc

Apple Inc.

Type	Publicly-traded corporation
Founded	California, USA - 1976
Founder(s)	Steve Wozniak, Steve Jobs, and Ron Wayne
Headquarters	Cupertino, CA, USA
Area served	worldwide
Key people	Steve Jobs (co-founder and CEO), Peter Oppenheimer (CFO, Principal Accounting Officer, Sr. VP of Fin. and Corp. Controller), Timothy Cook (COO), Ron Johnson (VP of Retail), Anthony Fadell (VP of Ipod Division)
Industry	technology, personal computers
Products	personal computers, portable digital music players, and mobile communication devices, as well as related software, services, peripherals, and networking solutions
Services	retail stores, hardware and software services
Revenue	13.93 billion USD
Operating income	1.65 billion USD
Net income	1.34 billion USD
Total assets	10.3 billion USD
Employees	21,600 (full-time)
Website	http://www.apple.com

Company History

The first Apple computer was designed by Steve Wozniak (a then-HP employee) and Steve Jobs. They sold fifty units of the Apple I to a local computer store in 1976, and continued to design new models, including the Apply ][+ and Lisa in the 1970s, eventually gaining investment from Xerox in 1978.

Corporate Accountability

Labor

Longhua town in Baoan district, Shenzhen province, China, is dominated by the Foxconn factory and its dormitories. This facility produces iPods for Apple. It has over 240,000 employees, with plans for 300,000 in the near future. Although workers receive free housing and food, have medical benefits (the company pays 80% of expenses), and have 3 months of maternity leave, workers at the factory live in dormitories so crowded and noisy they cannot sleep properly, are forbidden from cooking or having visitors, are isolated because of the barren world outside the factory gates, and are not paid for all of their wages.

Lite-On Xuji Electronics Co., Ltd. Is a keyboard manufacturer based in Dongguan, China. The factory was founded in 1995, and while Dell is its major buyer, Lite-On Xuji sells keyboards to Acer, Apple, Foxconn, Gateway, HP, IBM, Lenovo, Logitech, Microsoft, NEC, Sony, and Toshiba. According to a 2008 report conducted by SACOM and Bread for All, the factory employed 3000 workers who work between 10 and 12 hours a day. The factory began paying workers legal wages and overtime wages in 2008, while they had been paying illegally low wages in 2006 and 2007. However, workers continue to work more than 100 overtime hours per month, well about the legal limit of 36 overtime hours monthly. Due to long hours standing, repetitive tasks, and high work speed, workers suffer from swollen legs, back pain, and other repetitive motion injuries, as well as irritation from paint and paint thinner fumes . Despite these problems, Xuji factory has no program in place to “identify, evaluate, and control the hazards that arise from physically demanding work.” Management threatens workers who make mistakes with the possibility of the withdrawal of factory client orders. Worker dormitories are very crowded and noisy, housing 16 workers per room, who must share all facilities in common and often have trouble sleeping due to noise. While workers were not aware of their labor rights under the EICC, they still “expressed the urgent need” for safety training as well as shortened standing work hours or at least longer breaks and rest periods.

Environment

Apple received a score of 4.9 out of 10 possible points in the 2009 Greenpeace International ranking, scoring positive points for releasing products free of brominated flame retardants (BFR) and PVC vinyl plastic.

Lawsuits Run Amok

"Millions of colors" lawsuit

On March 21, 2008 Apple settled the "millions of colors" lawsuit filed against them. "Two California professional photographers filed a class-action suit [in May of 2007] saying they were duped into buying MacBook Pro notebooks by Apple's claim that the MacBook and MacBook Pro could display millions of colors." Many alleged the lawsuit was frivolous in nature and should never have been heard in court.

Apple Sued Over iPhone 3G Problems

On August 20, 2008, "An Alabama woman...filed a class-action lawsuit against Apple over reception and speed problems with its iPhone 3G. The plaintiffs in the class action lawsuit claim that "Apple is selling a defective product, is benefiting from it financially, and she and other class members are therefore entitled to damages, costs and attorneys' fees. The suit said the case has at least 100 class members and would seek damages in excess of $5 million."

Another 3G Class Action Lawsuit Filed

Another suit was filed against Apple for its iPhone 3G in September of 2009, which accused Apple and iPhone wireless provider AT&T of "misrepresenting the speed, strength, and performance of the 3G bandwidth network on the new devices. 'Apple and AT&T have engaged in a collaborated scheme to deceive...consumers, since the iPhone 3G and AT&T 3G network [are] faulty and rarely provides 3G connectivity to its customers,' [said] the suit, which was filed in California Superior Court. 'Most of the time Mr. Gillis receives no 3G connectivity at all.'"

In re iPod nano Cases

Case Background

According to a publication called the Red Herring, as reported by AppleInsider.com, the lawsuit was filed on behalf of iPod Nano owner Jason Tomczak and others who [had] purchased the relatively new device. The lawsuit alleges Tomczak rubbed a paper towel on the face of his nano and 'that alone left significant scratches.' In the suit, lawyers for the plaintiffs charge that screens on the nano 'scratch excessively during normal usage, rendering the screen on the Nanos unreadable, and violating state consumer protection statutes [...] and causing Plaintiff class members to incur loss of use and monetary damages.' The suit goes on to allege that the player's screen 'scratches so excessively that the items shown on the screen can no longer be viewed by the user. In fact, if users were to put their nanos in their pockets with common items such as coins, keys, a money clip, a credit card, or even the earphones that accompany the nano, the devices would likely scratch so badly that viewing the screens would be extremely difficult, if not impossible.'"

The case was a class action lawsuit filed by the California Superior Court for the County of Los Angeles. The plaintiffs in this case grieved that the First Generation iPod Nano contained a design or manufacturing defect that resulted in excessive scratching and also claim that Apple failed to disclose the scratching issue, which, in turn, was a breach of the warranties associated with the iPod nano. Apple eventually chose to agree to a settlement for the case in order to avoid burdensome and costly litigation. The settlement, though, was not an admission of wrongdoing or an indication that any law was violated. Monetarily, Apple agreed to pay a $22.5 million settlement fee, which amounted to between $15-$25 for each purchaser of the Nano.

A copy of the Class Notice can be seen here: http://www.ipodnanosettlement.com/pdfs/AIN_Notice.pdf.

A copy of the Claim Form Instructions can be seen here: http://www.ipodnanosettlement.com/pdfs/AIN_INS.pdf.

Description of iPod nanos Covered by the Settlement

"The iPod nanos covered by the settlement are the uncoated First Generation iPod nanos. These iPod nanos were first sold beginning in September 2005, and have a black or white plastic front and a stainless steel back. Some but not all iPod nanos were uncoated. Some iPod nanos were coated beginning in approximately December 2005. To be entitled to a payment under the settlement, you must have experienced scratching of your iPod nano that impaired your use or enjoyment of your iPod nano and have a claim on file."

Apple sued for $1m over $200 iPhone discount

As reported by the United Kingdom's Sunday Times, on October 7, 2007, Apple was sued for over $1 million for "slash[ing] the price of the device by $200 only 68 days after its US launch. [A man] who waited 'for hours' to buy a 4GB version of the iPhone in July three days after its debut, is accusing Apple of 'price discrimination, underselling, discrimination in rebates, deceptive actions and other wrongdoings[.]'"

Apple Settles Canadian iPod Class Action Lawsuits

On May 12, 2008, "Apple Inc. agreed to settle a pair of class-action lawsuits in Canada alleging it misled customers about the staying power of their iPods....The lead plaintiffs in the lawsuits...claimed Apple misrepresented iPods' battery life by claiming they were capable of eight to 10 hours of continual music playback. After recharging, however, the iPods' battery life began declining."

Apple iPhone 4 'Death Grip' Lawsuit

On July 1, 2010, a class action lawsuit was filed against Apple alleging that the new iPhone 4's were "defective" and rampantly dropped calls. The case was filed by two Maryland residents who accused Apple and AT&T of "negligence, fraud, and deceptive trade practices, among other things." "'[They] have experienced numerous dropped calls, and as a result, [they] are left with a device that cannot be used for the normal purpose and in the normal manner in which such devices are intended to be used,' according to court documents. Overall, the suit accuses Apple of defect in design, manufacturer, and assembly as well as breach of express warranty. Apple and AT&T are accused of general negligence, breach of warranty, deceptive trade practices, intentional misrepresentation, negligent misrepresentation, and fraud by concealment."

Apple Sued Over New IPhone Reception

On July 1, 2010, Apple "was sued over reception problems with its new iPhone 4 by consumers who accused the company of unfair business practices and false and misleading advertising. The June 24 introduction of the iPhone 4 was marred by criticism that signal strength diminishes when users cover the bottom left corner of the phone with their palm."

“'Apple’s sale of the iPhone with this unannounced defect, assuming Apple’s prior knowledge of the defect, constitutes misrepresentation and fraud,' Christopher Dydyk of Cambridge, Massachusetts, said in his complaint. 'In omitting to disclose the defect in the iPhone 4, Apple perpetrated a massive fraud upon hundreds of thousands of unsuspecting customers.'”

Class-Action Lawsuit Against Apple and AT&T

"The [class action law] suit combines individual lawsuits that argue that Apple and AT&T secretly teamed up on an exclusive deal that forced buyers who signed up for a two-year contract when they bought the iPhones effectively to commit to a five-year contract. Neither Apple nor AT&T has commented on the terms of the deal between the two companies, which is widely believed to continue through 2012. The original complaint was filed in late 2007, claiming anti-competitive practices the suit sought to stop Apple from selling phones that can only be used on AT&T’s network and to prohibit the iPhone maker from issuing software updates that blocked ‘unlocked’ iPhones from functioning at all. The suit was amended in June 2008 to include the charge that the five-year Apple-AT&T contract locked iPhone buyers into using AT&T’s voice and data services beyond their two-year contracts."

The lawsuit also "takes issue with Apple's practice of "locking" iPhones so they can only be used on AT&T's network, and its absolute control over what applications iPhone owners can and cannot install on the gadgets."

Financial Information

In fiscal year 2009, 2008, and 2007, respectively, Apple reported the following incomes: $3,496,000,000, $4,834,000,000, $8,235,000,000 Apples income in 2006 was $1,989,000,000, while in 2005 it was $1,328,000,000

Ticker Symbol: AAPL
Main Exchanges:NASDAQ
Investor Website:http://www.apple.com/investor/

References

External Resources

• "iLounge.com - iPod Nano Screen Complaints Abound"

Criticism

• Martin Hart-Landsberg, "Apple and the Labor Process", Reports from the Economic Front,July 22, 2012.

Resources and articles

Related Sourcewatch

• Fred Anderson - former cfo