It seems that Apple is once again being hauled over hot coals because of what’s going on at companies it doesn’t own or control within its supply chain. Why is Apple held accountable for worker mistreatment in the supply chain while other companies that use the same suppliers don’t?
It’s all to do with branding and perceived value.
The majority of companies that manufacturer hardware such as PCs, tablets, smartphones and other consumer electronic devices have to operate with razor thin profit margins, most of the time in the single digit percentage points. Consumers demand cheap stuff and companies have to deliver at a price that people expect or run the risk of going out of business. When you buy that new PC and it comes loaded with bloatware, the OEMs been paid to load that stuff onto the PC, and use that revenue stream to help bring you a cheaper system. It’s a cut-throat, dog-eat-dog world.
Except for Apple.
Apple’s position is very different from the rest of the industry. Not only are its products seen as ‘designer’ or even ‘luxury’ (yes, mass market consumer electronics can be see as luxury) the company also enjoys fantastic margins on products it sells. Apple is not seen in the same category as the likes of HP or Dell or even IBM. Apple is more akin to a German car maker than it is a computer OEM, making products that people lust over and one day wish to own.
There’s nothing cheap when it comes to Apple’s products, but yet the company uses the exact same supply chain companies as those selling cheap products and scraping out an existance with tiny margins. While I don’t believe that an ‘Apple tax’ exists compared to PCs, it’s undeniable that you can pick up a beige-box PC or a generic-looking notebook for a lot less than you can pick up a similar product sporting the Apple logo. Your shiny new iPhone, iPad or Mac is assembled in the same factories which build similar devices that you can pick up for a lot less money.
So Apple’s problem isn’t that it’s using the same supply chain as its competitors, and that the supply chain has issues when it comes to how it treats its workforce, it’s that Apple is being held to a higher standard that the competition because it make more money from using that supply chain.
Personally, I think that the response from Apple CEO Tim Cook to the problems facing the supply chain have been frank and open, and I think that his commends regarding what Apple is doing to improve conditions are spot on:
Every year we inspect more factories, raising the bar for our partners and going deeper into the supply chain. As we reported earlier this month, we’ve made a great deal of progress and improved conditions for hundreds of thousands of workers. We know of no one in our industry doing as much as we are, in as many places, touching as many people.
At the same time, no one has been more up front about the challenges we face. We are attacking problems aggressively with the help of the world’s foremost authorities on safety, the environment, and fair labor. It would be easy to look for problems in fewer places and report prettier results, but those would not be the actions of a leader.
Supply chain issues aren’t an Apple issue, they’re an industry-wide problem, and part of the blame has to rest with us, the consumer - we constantly demand more for less, and how insatiable demand for gadgets and devices has created a culture where a blind eye has been turned to abuses in the past. That now, thanks to the efforts of companies like Apple, is changing.
