By Philip Kim
Apple is on a roll. Apple’s shares reached as high as $546 this week, and Apple’s stock market value recently topped the $500 billion mark. This is a record high for the tech goliath. Only four other companies have been members of this exclusive half-trillion dollar club: Microsoft, ExxonMobil, Cisco, and General Electric. This comfortably places Apple at the top as the world’s most valuable company. Apple’s momentum doesn’t seem to be slowing down either. Strong demands for the new iPhone 4S and iPad2 led Apple’s sales to grow 73% last year. With buzz around rumors of Apple unveiling the iPad3 on March 7th, Apple is on track this year to become the world’s largest consumer electronics company (measured by revenue), a title currently held by Samsung. It’s hard to imagine how Apple isn’t already. One cannot go a day in the Big Apple without seeing a dozen iPhones and iPads firmly clutched in the hands of New Yorkers.
Just how much is Apple worth? Probably more than you think. While Americans continue to groan at the gas pumps, Apple’s worth could cover 45 days of worldwide oil consumption (assuming 86 million barrels a day at $83 per barrel). Republic of Apple? It may as well be, since Apple’s valuation is higher than the GDP of entire individual countries, such as Poland, Belgium, Denmark, Sweden, Saudi Arabia, Singapore, Israel and Taiwan. In other words, Apple’s valuation is five times larger than the revenue of the global coffee industry, ten times larger than the valuation the NFL’s 33 franchises, and two times larger than the cost of an entire Apollo Space Program. To top it off, Apple’s stockpile of $76 billion in cash is more than the US Treasury’s cash balance of $74 billion.
The executives and shareholders of Apple are undoubtedly gleaming as Apple’s valuation continues to soars at a blistering rate, but at what price to humanity? After all, somebody has to make enough iPads and iPhones to keep up with the ever-increasing demand. Apple’s solution: outsource the manufacturing process to Foxconn. However, Foxconn has been subject to controversies relating to poor working condition and other human rights violations. Last year, an explosion at Foxconn’s Chengdu factory, which produces the iPad2, killed three workers. The company is accused of employing teens and forcing its employees to work like drones. Many critics are pointing fingers at Apple for not doing enough to alleviate human rights violations that occur in its supply chain. Strings of employee suicides have added fuel to the controversy. Sun Danyong, a 25 year-old male employee of Foxconn, committed suicide in 2009 after losing an iPhone4 prototype. He was worried about being punished and blacklisted. With pressure mounting, Apple finally caved in early this year, admitting it had a human rights problem. This may be a start, but it remains to be seen how Apple will deal with Foxconn’s relentless pursuit of profit.
Apple’s stock and productivity continue to soar against all odds. While some consumers are surprised at company’s success despite turbulent economic conditions in the United States, I am more surprised at the Apple’s growth even in the face of blatant human rights violations. One year ago, Apple was publicly criticized for its affiliation with Foxconn, an electronic manufacturing plant that provides workers with inhumane conditions and treatment.
In an attempt to remedy the poor conditions, Apple hired the Fair Labor Association this year to audit the environment at Foxconn. However, it appears that the blatant human rights violations at Foxconn had little effect on consumers. In fact, since the incident, there is an increased demand for Apple goods, including IPads, IPhones and computers. Admittedly, such violations have not halted my investment in Apple products. Nonetheless, it makes me wonder what it would take for consumers to stop buying electronic from a company that permits inhumane treatment of its workers. Apparently there is a threshold to the severity of human rights violations, and it appears that Apple has yet to cross the line.
Alex Lippman
I think a major issue here is the extent to which the consuming public, particularly that in the United States, is aware of these human rights violations. Almost everyone in the country is familiar with the newest Apple commercial or product and rush frantically to the nearest Apple store (likely not too far away) to invest in the latest tech gadget. I do wonder: how many people would really stop purchasing Apple products if they were aware of the actual blood, sweat, and tears that went into making them? While I commend those authors who bring light to the situation, as does the author here, mainstream media should be focusing more on the totality of Apple’s actions and not just the historic rise of Apple stock. Maybe then these problems would end.