They are worse than the damn oil companies.

They spend 203 dollars on an iphone, pay Chinese workers 7 to make it and turn it out for 600 dollars. They are not making life better for anyone but their shareholders.

They are making like a 75% profit margin. If they had all of their products assembled in the US and paid their workers 20 an hour, they would STILL have a 45% profit margin without raising any prices. Then they could be considered a decent company.

Right now they are scum because they make life worse for their assembly workers and don't help things at home.

Screw apple.

[Edited on April 29, 2012 at 1:27 AM. Reason : they get a freepass because their fanboys are liberals.]

4/29/2012 1:26:55 AM

The people working in the assembly lines (which also produce products for companies like Dell, Samsung, and so forth) are more than happy with their compensation, in fact Apple pays some of the highest in the industry in that region.

I would argue that they're making life much better for some people back home. I adore my iPhone and get amazing pleasure out of using it as well as their ecosystem of apps and integration. I would pay $600 for the phone outright but much like other higher end smartphones, they're available for the same $200 you would pay for a Motorola and a contract.

4/29/2012 1:43:46 AM

Quote :

"They are making like a 75% profit margin. "

Honestly, I think the worst part of it is the California deal. They don't pay the same taxes as the little guy (who might be a competitor in some area). It's not that I don't think they should be able to skirt taxes by moving to a different state, but in order to do so... I think they should actually have to move to a different state. Heck, if Nevada is going to let Apple have their way with the tax code, then let them move there and write on their devices that they were designed by Apple in Nevada.

I don't buy Apple products, but not for the corporate sourcing or tax decisions. I don't buy their products because I don't like their command and control model for hardware and software. I would rather use products that are more buggy and part of a larger and generally more disjointed software ecosystem, because that's just how I am.

4/29/2012 2:23:05 AM

Quote :

"they get a freepass because their fanboys are liberals"

Lol if only... That would be a LOT of liberals.

But, Apple doesn't get a free pass, they never have.

They were literally on the brink of bankruptcy 11 years ago, which is a pretty short time and have slowly worked their way back from death. The media just got so used to viewing apple as this once great, pathetic beleaguered tech company, which allowed Apple to slip under their radar until recently where their wildly successful products are shining a big spotlight on their businesses practices.

And as someone has pointed out already, Apple isn't worse than any other company, and is better than most in many ways.

Despite this, being the top dog right now, the media is going to be keeping a close eye on them (as they should be) and Apple has been handling it well. Theyre building what might be one of the "greenest" data centers on the planet (despite the higher upfront and maintenance costs) here in NC. It does seem like though that under Cook, Apple is catering more to the share holders, which does concern me. Jobs had a notorious disregard for share holders, which I think worked for apple.

I'm not really,sure where you're getting those costs to produce here though, I somehow doubt that's accurate.

4/29/2012 2:24:22 AM

Quote :

"It does seem like though that under Cook, Apple is catering more to the share holders, which does concern me. Jobs had a notorious disregard for share holders, which I think worked for apple. "

How exactly? This might be a story that I'm not familiar with, but in the long view, Jobs was pretty amazing for the shareholders. Not to mention, that Apple is actually kind of amazing in that they haven't used a lot of the balance sheet tricks that other companies have. Like, share buyback and employee stock options are things that corporate leadership likes to do these days but is almost never better for the shareholders.

4/29/2012 2:29:45 AM

Jobs was obviously great FOR the shareholders but in terms of saying and doing things to appease them (like at the shareholder meetings) he was pretty dismissive in general.

The most recent example of this was the dividends thing. The shareholders had been wanting something like this for a while, but Jobs was content to sit on the money for a rainy day (after all, jobs lived through the company goning from the very top with thr Apple II to the very bottom with the Pippin). Cook OTOH has spent most of it on divdiends that benefits the small stock holders in no way but which will be a nice bonus for their larger stock holders. I can see Cook listening to the stock holders even more on future product direction decisions, something Jobs wouldn't have done without the board twisting his arm (not that this is all bad-- it brought about the App Store, but I think it's more bad than good).

4/29/2012 2:43:04 AM

Quote :

"Cook OTOH has spent most of it on divdiends that benefits the small stock holders in no way but which will be a nice bonus for their larger stock holders"

I don't know what you're saying here. I don't think there is a distinction between what helps large versus small stock holders. Value creation is value creation.

The pressure for the dividend was understandable since they were so awash with income. But they have still spent a surprising amount of investment. In 2011 alone they put something like $40 billion into investments, which I can only assume is sufficient to build our future robot overlords. Another thing they've done is to increase the # of outstanding shares, versus shrink them. At the share price today this is the only thing that makes sense.

Once you get so big you have to entertain really major questions about what the heck you plan to do as such a large company. They're big now, but with a 25% profit margin and the ability to make investments on the scale of $100 billion, they could thinkably get bigger than anything history has ever seen. Although some people would prefer that, it seems at least slightly unsustainable.

4/29/2012 3:02:49 AM

^ I was referring to their cash reserves. That 100billion$$ has been built up over 12 years.

And a 20 cent payout per share is meaningless to the "small time" investor that owns even $10k of stock, but is valuable to the larger investment firms that have hundreds of thousands or millions in stock.

No company is on top forever. Apple will return to earth just like IBM, HP, Dell, MS, etc had to. Google hasn't hit their stride yet either IMO, and they clearly want some of Apples lunch. Jobs was perhaps overly sensitive to this fact. Cook seems to be doing what makes the most "business sense" on paper.

4/29/2012 3:16:22 AM

Apple has $120 billion in total assets. Their market cap is closer to $500 billion, because this is based on income potential, not the sum of its parts. Yes, they have about $45 billion in current assets, which are just about as good as cash. But $55 billion of their assets are in long-term investments, which is my greatest cause of curiosity. Did all this money flow into diabolical secret labs? More than likely, yeah.

In the sense they they built up their total assets of $120 in 12 years, that is true. However, about $100 billion of that was built up in just the last 4 years. I agree, they're going to have to come back down to Earth, but their recent performance has been Earth-shattering and I'm worried that it will give them unprecedented leverage. Cash from operating activities was like $37 billion in 2011. Keep this up for 5 more years, and that's... a lot. The bigger question regarding dividends is what they're going to do with so much money if they don't pay it back to the investors. Space colonies?

4/29/2012 3:45:30 AM

I think there's a LOT better they could do with the money than dividends that amount to a pittance for all but the biggest investors. This buys Apple a lot of political capital, but who needs that when they are selling absurd amounts of products?

They could invest in university research programs, or give a boost to the Gates Foundation, or any range of charitable functions. A space colony would have been a better use even IMO...

4/29/2012 3:56:22 AM

In their defense, their new headquarters looks an awful lot like a space colony.

4/29/2012 4:47:47 AM

http://www.cnn.com/video/#/video/bestoftv/2012/04/27/ym-iphone-teardown-costs-manufacturing.cnn?iref=allsearch

Quote :

"I'm not really,sure where you're getting those costs to produce here though, I somehow doubt that's accurate."

saw it on tv but found it

4/29/2012 9:03:10 AM

First Quarter 2012 ExxonMobil     Apple  
Revenue (Billions)	$124.0	$39.2
Income Taxes (billions)	$7.7	$3.9
Profits (billions)	$9.5	$11.6
Profit Margin (%)	7.6%	29.6%

4/29/2012 9:19:16 AM

Quote :

"They could invest in university research programs, or give a boost to the Gates Foundation, or any range of charitable functions. A space colony would have been a better use even IMO..."

As a holder of AAPL, I would be pissed if they started giving away the cash to charity. They already do plenty of that--it's called taxes.

4/29/2012 9:56:30 AM

I'm perfectly fine with Apple's philosophy of make as much money as they can and give none of it to charity. The point is that the shareholders then use their own discretion when deciding what cause to support because, after all, they are the boss.

So as a holder of AAPL and a general stock market investor, did you give to any worthy causes?

[Edited on April 29, 2012 at 11:10 AM. Reason : ]

4/29/2012 11:09:44 AM

Quote :

"they get a freepass because their fanboys are liberals."

4/29/2012 11:58:21 AM

Quote :

"As a holder of AAPL, I would be pissed if they started giving away the cash to charity. They already do plenty of that--it's called taxes."

Yeah ths is why being beholden to share holders isn't always good.

And Apple, like all big companies, uses their size and power to skirt taxes that others have to pay.

Of all the things Apple can do with money they aren't going to reinvest, a dividend is the least productive.

Quote :

"http://www.cnn.com/video/#/video/bestoftv/2012/04/27/ym-iphone-teardown-costs-manufacturing.cnn?iref=allsearch [quote]I'm not really,sure where you're getting those costs to produce here though, I somehow doubt that's accurate."

saw it on tv but found it[/quote]

You can't just look at rote hardware costs to determine profit margin. It costs money to pay the designers, build the factories, run the company, etc.. Do you think any product you buy has anywhere near the value of materials in it? For electronics, the physical parts are a small portion of the full costs.

[Edited on April 29, 2012 at 1:34 PM. Reason : ]

4/29/2012 1:28:36 PM

Are you implying that a 45% profit margin on iphones wouldn't generate enough to run the company?

4/29/2012 1:43:42 PM

It wouldn't be easy to determine if it is or isn't. I'm not sure why it's relevant either, or at least it's secondary to the issue of taxation.

They can make as much profit as they want if they pay their fair share of taxes and operate in an otherwise ethical manner.

I would much rather them pay the Chinese workers more money, pay the taxes they owe, and continue to push the industry forward than build factories in the US.

4/29/2012 1:49:18 PM

They could sell the phones a few hundred dollars cheaper and keep doing the same thing or they could keep the prices and pay their workers 20 dollars an hour which is an honest and livable salary. They need to do something to make lives better. They are currently ruining lives by overcharging and exploiting poor worker conditions.

4/29/2012 1:55:33 PM

How are they overcharging? The iPhone is in the same price range as every other phone, and I dont know anyone who pays full price for one anyway since most people get some deal through the phone company.

I do agree with you about paying the Chinese workers more, but I don't see that chewing up half of their profit margin.

4/29/2012 2:00:29 PM

^^20 bucks an hour in china. lol. good luck seeing that idea through.

4/29/2012 2:09:07 PM

Keep in mind that Apple still can't keep up with worldwide demand for the iPhone, a demand that is growing is china (china has 7x the population of the us, which is staggering). iPhone's on the black market there go for WAY above market price.

Foxconn employs roughly about a million people to work on the Apple contracts from what I gather.

Apple probably couldn't even find a million people to work a factory job in the us, and would have even a harder time finding 2 or 3 million to eventually feed the growing world demand.

Of they paid the Chinese workers more, 5 billion dollars would buy them on average a $5000 raise, meaning they would still be well below what a poor American makes (I wouldn't be against this but some people would still complain).

http://micgadget.com/16645/iphone-4s-selling-at-crazy-prices-in-hong-kong-thousands-line-up-for-cheaper-iphone-4/
http://www.wired.com/magazine/2011/02/ff_joelinchina/all/1

If I were Apple I would building robots to replace the humans, so there is no one to exploit, and it would probably be cheaper in the long run. Of course, then people would complain that they aren't providing jobs...

[Edited on April 29, 2012 at 2:17 PM. Reason : ]

4/29/2012 2:14:16 PM

I think everyone needs to explicitly state what their opinion of Apple is

4/29/2012 2:42:53 PM

^^20bucks an hour in the us would do the job.

4/29/2012 3:46:36 PM

It appears that several of you have mistaken this business for some sort of charity.

4/29/2012 5:29:51 PM

Quote :

"It appears that several of you have mistaken this business for some sort of charity."

4/29/2012 5:37:46 PM

so far as working conditions abroad go, Apple hasn't gotten a free pass at all. Over the past few years there have been several investigative articles/reports/whatever that have absolutely hammered Foxconn and Apple (probably moreso than any other company in recent history). They are pretty much what Nike was in the 90's to the fair labor/anti-globalization/whatever crowd.

Apple has, at the very least, responded to these criticisms and now does audits of conditions. Whether the programs they have instituted actually help workers at all (or whether a majority of people even give a damn about working condition issues) is up for debate. . . . .

but they certainly haven't gotten a free pass.

4/29/2012 6:00:03 PM

someone should tell occupy about this.

4/29/2012 7:55:51 PM

Quote :

"I dont know anyone who pays full price for one anyway since most people get some deal through the phone company. "

[Edited on April 29, 2012 at 8:19 PM. Reason : ]

4/29/2012 8:19:01 PM

Quote :

"It appears that several of you have mistaken this business for some sort of charity."

Well, to be fair, the media does treat them as if they're a religion/cult.

4/29/2012 9:08:07 PM

No, Apple treats it's customers as if they belong to a cult. They have been using advanced advertising techniques to brainwash their customers with emotional branding. It's brilliant, but evil. They actually have gotten millions of people to pledge their allegiance to a corporation who does not give one flying fuck about them aside from making them buy the next big thing.

I have an iPhone but that's because it cost me $99. I will never buy their computers and I wouldn't have bought the phone if it wasn't incredibly discounted.

4/29/2012 10:52:20 PM

Quote :

"It appears that several of you have mistaken this business for some sort of charity."

There's no good reason a business can't have a social conscience. It works for Ben & Jerry.

Tim Cook, despite not being a "product guy", seems to actually have more of a social conscience than Jobs (who had practically none), but this could be entirely strategic.

I can understand a few years ago calling Apple a cult, but Apple is thoroughly main-stream now. I'm not sure how the "cult" label applies anymore...

[Edited on April 29, 2012 at 11:02 PM. Reason : ]

4/29/2012 11:02:07 PM

Quote :

"I have an iPhone but that's because it cost me $99. I will never buy their computers and I wouldn't have bought the phone if it wasn't incredibly discounted."

And I'm sure this had no impact, whatsoever, on the price you wound up paying for your service plan.

http://www.getrichslowly.org/blog/2011/08/02/how-to-save-on-your-cell-phone-plan-with-secret-no-contract-deals/

Your "discount" left you paying more. Companies will gladly give you discounts that have you pay them more in the long run. They're very good at that.

4/29/2012 11:05:14 PM

Quote :

"There's no good reason a business can't have a social conscience. It works for Ben & Jerry."

Of course--that's fine and up to the business. I'm saying that it's stupid and wrong to expect them to.

4/29/2012 11:07:58 PM

I disagree that it's stupid and wrong. It may be naive, but it's just and should be more common to expect businesses to do this. If businesses did this on their own more often, it would deflate a lot of the pressures to regulate them more. And generally make society a better place.

[Edited on April 29, 2012 at 11:17 PM. Reason : ]

4/29/2012 11:10:38 PM

I think there's a major problem in our philanthropy model.

A company can give money to local schools, but then pay the parents of the kids at the school below a living wage. We live in an interconnected world, and if you want to be ethical, you should first apply those ethics in the relationships that form the core of your business, where you most strongly impact the lives of others.

4/29/2012 11:15:45 PM

Quote :

"And I'm sure this had no impact, whatsoever, on the price you wound up paying for your service plan."

I was going to upgrade to a data plan anyway. An iPhone was one of many options I entertained. I'm well aware that the cost of a data plan goes toward paying for the phone. But if I'm going to be getting a data plan anyway, why does it matter? The point is that I'm not a sheeple who drools over a new product that is exactly the same as the old one except with a camera.

4/29/2012 11:24:52 PM

I wonder if people would be willing to pay higher prices for Apple products if they were made in the United States?

Probably not.

4/29/2012 11:36:42 PM

I would be willing to have apple make less profits and make their products in the us though.

4/29/2012 11:47:12 PM

It's not just a move to save on labor costs. That's a minor consideration among a myriad of more significant factors.

To summarize: not only does Apple have no obligation to build its products in America----and to a large degree, not only is it not even desirable to have companies diverge from free trade and operate in a less efficient manner--but Apple can't deliver the same results in America. The capabilities just aren't here.

http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?pagewanted=1&_r=1


Also, in addition to the stuff noted in the Times article, note that Apple (and all sorts of other companies) exert all sorts of effort to minimize taxes. That should come as no surprise, but let me translate that: Corporate income tax in America is high, so companies structure things so that, at least on paper, the taxes are due in places where the rates are lower. Our country costs itself lots of corporate tax revenue by keeping the rates high--not only by the classic example of discouraging business activity in America, but by encouraging companies to work around our tax laws. If our corporate tax rates were competitive with the rest of the world, there would be no incentive to do this, and they'd just pay up to the U.S. government. We need to lower the rates, remove the resulting incentive to work around the U.S. taxes, and then close special interest loopholes extended to the companies who hire the best lobbyists (which would also be less attractive to begin with if the U.S. corporate tax rates were lower).

[Edited on April 30, 2012 at 12:06 AM. Reason : ^ when your opinion gains more weight than Fidelity and Vanguard, maybe you'll get your way.]

4/30/2012 12:05:43 AM

Quote :

"Also, in addition to the stuff noted in the Times article, note that Apple (and all sorts of other companies) exert all sorts of effort to minimize taxes. That should come as no surprise, but let me translate that: Corporate income tax in America is high, so companies structure things so that, at least on paper, the taxes are due in places where the rates are lower. Our country costs itself lots of corporate tax revenue by keeping the rates high--not only by the classic example of discouraging business activity in America, but by encouraging companies to work around our tax laws. If our corporate tax rates were competitive with the rest of the world, there would be no incentive to do this, and they'd just pay up to the U.S. government. We need to lower the rates, remove the resulting incentive to work around the U.S. taxes, and then close special interest loopholes extended to the companies who hire the best lobbyists (which would also be less attractive to begin with if the U.S. corporate tax rates were lower)"

I totally agree with all of this.

4/30/2012 12:11:00 AM

^^ That article sums everything up nicely. The important thing is not that American manufacturing would be prohibitively expensive. The important thing is that manufacturing in China is faster, more flexible, and able to accommodate the larger scale, not just with huge numbers of workers "on the line", but also engineers, etc. The nut factory is down the street from the bolt factory, which is across the street from the assembly plant, and they can all be ready to make that piece of glass an 1/8" thinner at a moments notice and time a zillion.

[Edited on April 30, 2012 at 12:14 AM. Reason : ]

4/30/2012 12:14:01 AM

Quote :

"There's no good reason a business can't have a social conscience. It works for Ben & Jerry. "

did you just imply that a company that sells a version of ice cream with three times the caloric density and saturated fat content of competitors has a social conscience? Ben Cohen had to undergo a quintuple bypass at the age of 49 and can't even eat the shit they sell anymore, but they've made no attempts to make their product any healthier.

4/30/2012 12:20:41 AM

people want this version of ice cream, its called the good stuff.

you can go buy something else, however.

4/30/2012 6:40:38 AM

^^since when is ice cream healthy?

4/30/2012 8:03:17 AM

Zero. Quantity of apple products required to get me to work and to get food to my table.

4/30/2012 9:08:15 AM

Quote :

"But if I'm going to be getting a data plan anyway, why does it matter?"

In other words you didn't read the link I posted.

The idea of a data plan without the cost of a phone rolled into it is such a foreign idea that most people don't even give it credit for existing. If you come out and declare that you want to pay upfront for the phone, then they will look at you funny because they assume all Americans have a loan shark kind of discount rate, but in the end you will save money over the 2 year period.

4/30/2012 9:57:01 AM

Quote :

"I would be willing to have apple make less profits and make their products in the us though."

lol thats not how it works

4/30/2012 10:20:54 AM

Quote :

"The nut factory is down the street from the bolt factory, which is across the street from the assembly plant, and they can all be ready to make that piece of glass an 1/8" thinner at a moments notice and time a zillion."

Wait, wait....you mean there's more to it than just how much the employees are paid? Holy shit who would have thought?

Quote :

"I dont know anyone who pays full price for one anyway since most people get some deal through the phone company. "

Right...most people pay an insane premium on their phones because most people refuse to look outside of anything other than the standard 2-year contract.
Compare the price of purchasing an iPhone outright and having 2-years of unlimited pre-paid service with a smaller carrier that piggybacks onto Verizon/AT&T/Sprint's networks vs the standard "unlimited" contract plan for the same 2 years with the big guys. The difference is quite a bit. Most people end up paying $$$$ for that "$200 iPhone".

4/30/2012 10:57:36 AM