Apple success is based on “creating innovative, high-quality products and services and on demonstrating integrity in every business interaction. ” According to Apple, four main principles contribute to integrity: honesty, respect, confidentiality, and compliance. Although Apple has consistently won first place as the World’s Most Admired Company, it has experienced several ethical issues within recent years. Among are privacy, sustainability, product quality, intellectual property and patents. Product Quality
Apple’s product quality problem started when the company introduced the iphone 4, customers began to complain of reception problems. The problems were caused by antenna interference that occurred when users held the phone a certain way. Privacy In 2011 Apple and Google disclosed that certain features on the cell phones they sell collect data on the phones’ locations. Consumers and government officials saw this as an infringement on user privacy. The companies announced that users have the option to disable these features on their phones.
This was not entirely true for Apple as some of its phones continued to collect location information even after users had disabled the feature. Apple attributed this to a glitch that it remedied with new software. Both Google and Apple defend their data-collection mechanisms, but many government officials disagree. The government is considering passing legislation on mobile privacy, actions which could have profound effects on Apple and other electronic companies. Sustainability Apple has taken steps to become a greener company, such as reducing its environmental impact at its facilities.
However, the company admits that the majority of its emissions come from its products. In 2009 Apple stated that its operations contributed to 9. 6 million metric tons of metric gases being released. While 3 percent came from its facilities, 97 percent came from the life cycle of its products. Since Apple’s success hinges on constantly developing and launching new products, the environmental impact of its products is a serious issue. “Apple Supplier Responsibility: 2011 Progress Report,” offers an insight into its awareness of such issues.
The report documents audits conducted at 127 manufacturers’ facilities and details breaches of its Supplier Code of Conduct. Violations included cases of worker endangerment and health impairment from exposure to hazardous chemicals, 91 child workers, which was 9 times as many as reported in the previous year, as well as incidents of bribery, violations of local labor laws, and discriminatory employment practices. In addition, 37 facilities reportedly failed to monitor and control air emissions, and 80 facilities were found not to store or handle hazardous waste properly.
The report further addressed Apple’s response to the worker suicides at Foxconn’s Shenzhen factory last year. To encourage its customers to recycle, Apple has created a recycling program at its stores for old iPods, mobile phones, and Macs. Consumers that trade in their old iPods can receive a ten percent discount on a newer version. Consumers recycling old Macs that still have value can receive gift cards. Apple partners with regional recyclers that comply with related laws. Despite this recycling program, many consumers feel that tossing out their old products is more convenient, particularly if they have no value.
E-waste will remain a significant issue as long as consumers continue to throw away their old electronics. Intellectual property In 1982 Apple filed a lawsuit against Franklin Computer Corporation that highly impacted intellectual property laws. Apple alleged that Franklin was illegally formatting copies of Apple II’s operating system and ROM so that they would run on Franklin computers. Another notable case was Apple’s lawsuit against Microsoft after Apple had licensed technology to Microsoft. When Microsoft released Windows 2. , Apple claimed that the licensing agreement was only for Windows 1. 0 and that Microsoft’s Windows had the “look and feel” of Apple’s Macintosh graphic interface system (GUI). More so, Apple’s use of the domain name iTunes. co. uk. The domain name had already been registered by Ben Cohen in 2000, which used the name to re-direct users to other sites. Cohen eventually used the domain name to redirect users to the Napster site, a direct competitor of Apple. Apple attempted to purchase the domain name from Cohen, but when negotiations failed the company appealed to UK registry Nominet.
Usually, whoever registers the domain name first gets the rights to that name. However, the mediator in the case determined that Cohen abused his registration rights and took unfair advantage of Apple. Apple won the right to use the domain name, which led to complaints that the big company (Apple) was being favored at the expense of smaller companies. In addition Apple faced another trademark lawsuit from Cisco Systems in 2007. Cisco claimed that Apple had infringed on its iPhone trademark. Cisco had owned the trademark since 2000.
Apple and Cisco had been in negotiations to discuss whether to allow Apple to use the trademark. However, Apple walked away from the discussions. According to Cisco, the company then opened up a front organization, Ocean Telecom Services, and filed for the iPhone trademark in the U. S. Some stakeholders saw Apple’s actions as a deceptive way to get around negotiation procedures. The lawsuit ended with both parties agreeing to use the iPhone name. However, Apple’s actions in this situation remain controversial. Patents
Apple filed a lawsuit against Samsung, claiming that Samsung had copied the designs of its iPhone and iPad for its own products. Kodak has filed a lawsuit against Apple and Research in Motion, alleging that the companies infringed on its patent on digital-imaging technology. In response, Apple countersued Kodak by claiming it violated Apple’s patents. Unfortunately for Apple, a U. S. International Trade Commission judge ruled in Kodak’s favor in Apple’s lawsuit. The issue still stands regarding whether Apple infringed on Kodak’s patents.
Kodak is seeking $1 billion in licensing revenue. Conclusion Apple appears optimistic about its future. The company has created a cult following of consumers who are intensely loyal to Apple products. Apple’s products or services are meant to offer superior solutions to those of competitors. In one of Apple’s newest offerings, Apple is taking its forays in the music industry further. The company has reached agreements with record labels to launch iCloud, a service that enables consumers to create and listen to their music collections without having to upload individual songs.
While Google and Amazon offer similar music storage services, Apple has more songs at its disposal with iTunes and its record label agreements. Seizing upon these opportunities can increase Apple’s share of the music and consumer electronics markets. Apple also faces its share of threats. It faces lawsuits from various competitors claiming the company stole intellectual property. Additionally, although Apple’s aggressive stance has helped it to protect its intellectual property, its tight hold over its products and secrets could be disadvantageous as well.