Why My Beloved iPhone Now Makes Me Sick To My Stomach

I didn’t know it at the time but my love affair with Apple began on November 22, 1983 … the day I bought my first business.   I was 22.  That fateful decision changed my life in many ways …  and also unexpectedly started a 30-year infatuation with Apple.  My business partner and I purchased a well established, and well known, family owned photo and computer business in the Baltimore-Washington metro area.  The business had a retail component but the real growth (and opportunity) was coming from the commercial division who was just starting to sell personal computers.  Our strength was selling to educational systems.  We eventually sold the business but that’s another story.

In 1983, the computer business was very different world.  Personal computers were just starting to catch on.  This was long before the Macintosh took the world by storm in the mid-80s.  There were a number of players, operating systems and technical approaches vying for viability but markets were beginning to settle around the following segments: personal computers for hobbyists (Commodore 64 and others), personal computers for business (IBM PC and compatibles), and personal computers for education (Apple II series).  Commodore and others faded as Apple and IBM (based on the Microsoft DOS operating system) were the two surviving approaches.  This was long before Windows and is still true today.  The winners from the early 80s are still the winners today.  Even though IBM smartly exited the PC business in 2005, the battle is still fought today between Apple and Microsoft powered personal computers.

Back to 1983 … there were no cell phones, no Internet, no e-commerce, no Apple stores and computers were manufactured in the USA … not in China.  Both Apple and IBM used resellers (or dealers) as their sales channels to market.  Apple even had a unique “black” version of the Apple II that was only sold to schools.  This is where we came in.  We used to sell Apple IIs by the truckload (literally).  We also customized and serviced them from the ground up.

Through all this, I developed an insider’s perspective and a fondness for Apple.  My respect and admiration for Apple has grown over the years.  I’ve stayed connected and involved with Apple in one way or another at key stages of my career.  I applauded the major successes (Macintosh, iPhone, iPad) and chuckled at the failures (Newton, Lisa, MobileMe).  I’ve never had a reason to think poorly of the company.  Until now.

It’s no secret I work for IBM today (see the personal opinion disclaimer).  IBM and Apple haven’t competed with each another for years.  One is corporate … the other is consumer.  I point this out because I have no agenda driving me to write this other then my conscious.

Today, Apple is the most successful consumer technology company by just about any measure.  Skyrocketing stock price, top 10 brand recognition and tons of cash  (~$97 billion).   Apple also stunned everyone with their recent earnings announcement.  During the last quarter of 2011, they made ~$13 billion in profit.   That’s more than twice as much for the same period in 2010, and more than any company has ever earned during a single financial quarter … except one.   Exxon Mobil made over $14 billion in a single quarter (thanks to high oil prices) in 2008.

Are you kidding me?!?!  Congratulations!  They deserve all the spoils and accolades.  Their products work better and are craved by the masses.  Their customer loyalty and devotion is like nothing we’ve ever seen in business before … myself included.  I have an iPhone, iPad and MacBook Air and love them all.  Within the last six months, I stopped using Windows and Blackberry completely.  I outwardly promote how great my experience with the company has been.  Even the AppleCare tech support is great … at a time when most companies call centers are a joke or non-existent.

But wait a minute, something doesn’t add up for me.

It’s the China worker thing.  Over recent years … as Apple’s bank account has increased … so have the charges about labor conditions in iPhone factories in China.  The New York Times, The Huffington Post and others are zeroing in on this at the moment.  My Mom used to say, “Where there is smoke, there is fire”.   We all know the media can be unreliable on these topics but they can be a pretty good watchdog too … just ask Rupert Murdoch and his staff.

In my mind, there are too many outrageous claims to ignore this any longer!

“Working excessive overtime without days off ” …. “Living together in crowded dorms” … “exposure to dangerous chemicals” … “Two explosions ‘due to aluminum dust’ killed four workers” … “Almost 140 injured after using toxin in factory,” … “Nets on buildings to prevent or deter stress related suicide attempts” … “falsification of records” … “worker suicides” … “beaten and interrogated by superiors over lost prototype”.

I want to know what is really going on.  Are workers really beaten or killing themselves so I can have an iPhone … or so Apple can have even more cash?  Neither is acceptable and both make me sick to my stomach.  This can’t be true, can it?  The more you read the harder you gulp.  It’s making me reach for the Pepto-Bismol.

Apple is certainly not a bad company.  They did donate $50 million to charity in 2011.  But considering how much is sitting in the corporate coffers at Apple it seems light to me.  I mean … they ARE loaded.  Apple donations represent a paltry .1% of their holdings and are a far cry from what others are doing.  Kroeger donates  almost 11% of profits to charity.  Even the allegedly “greedy” financial services firms are more charitable then Apple.  These firms seemed to get blamed for everything but you have to give them credit on this issue (no pun intended).  Morgan Stanley, Goldman Sachs and Bank of America are all among the top corporate givers.

But money is not my issue.  Taking responsibility for your actions is.

I am not an expert on this topic but Apple seems to have a reasonable policy on supplier responsibility.   However, I know from experience that having a good policy is not the same thing as enforcing a policy.  Some of the reports out there are claiming that Apple is not doing enough. In other words, looking the other way and pointing it back to the labor contractors.  Ahhhh … the beauty of outsourcing (if true).

It seems to me; that they hold all the cards and could fix this in about a nanosecond if they really wanted to.  This nonsense has been going on for at least six years and needs to stop.  Are the lower offshore labor costs worth all of this … loss of human life, inhumane conditions and reputation damage?

Apple is truly (and maybe uniquely) in a position to change how the world’s goods are made.  It has the money and the muscle to effect major change.  At the moment, it appears they lack the will, or conscious, to do anything serious about it.  I wonder if too much greed is driving behavior in Cupertino?  The numbers don’t lie.

Tim Cook should seize this opportunity and make this his issue.  Following Steve Jobs as CEO must be an incredibly hard thing to do.  I hope the new guy takes a stand and fixes this, before it is their undoing.  Nike and Wal-Mart both survived offshore labor scandals and so can Apple – but the time for decisive action is now.  Maybe it’s time these jobs come back home to the good ole USA.

I hope Apple grows a conscious soon. With new leadership in place, this should be easier to do.  Good luck Apple, I still love you but I won’t wait forever for you to fix this and I hate the taste of Pepto-Bismol.  Seriously, I wouldn’t normally blog about something like this but I felt the need to do something.

The Chinese government needs to man-up as well.  The economic growth in China is literally being fueled by blood, sweat and tears (not a joke) of their citizens.  I can only hope the conditions are not as extreme as being portrayed.

What about you … does it turn your stomach also?  Are you outraged?  You should be.

Blog update on February 13, 2011Apple issues statement about labor situation in China.  What do you think?  A strong enough response?