Apple plans to pay Foxconn half the cost of improving its labor conditions, as the company seeks to help Chinese workers while increasing overall consumer satisfaction.
Foxconn chief Terry Gou, speaking at his company's new headquarters in Shanghai, affirmed Apple's financial commitment to assisting its Chinese iPad and iPhone factories.
"We've discovered that this is not a cost. It is a competitive strength," Gou explained of plans to improve Foxconn working conditions. "I believe Apple sees this as a competitive strength along with us, and so we will split the initial costs."
Gou did not, however, disclose a specific dollar amount or show exactly where Apple would spend its money.
The idea of fair labor practices being a competitive strength for Apple nearly reverses the previous mindset of the Cupertino company, which first largely ignored reports from civil rights advocates and environmentalists about Foxconn's excessive overtime and unsafe working conditions.
But both the iPhone maker and its manufacturing partner now realize the negative publicity could tarnish Apple's reputation, as well as acknowledge many consumers care deeply about the provenance of their products' origins. Apple's abundant profits and huge cash chest -- juxtaposed with the persistent image of beleaguered iPad workers laboring in dangerous factories and strenuous conditions -- likely also created a contradictory tension many found difficult to reconcile.
Helping to shoulder the costs to address working conditions will likely be a wise investment on Apple's part, not only to help the workers that manufacture and assemble their products, but maintain their company reputation, especially as these issues continue to come under fire.
Some workers injured in factory explosions say they never received compensation, for example, while other employees committed a rash of suicides, reportedly in desperation over low wages.
In response to these incidents, consumer advocates like Change.org and Beijing's Institute of Public and Environmental Affairs condemned Apple for standing aside while its main supplier mistreated workers and polluted ground water.
But starting in February this year, Apple asked the Fair Labor Association to investigate alleged abuses at several Foxconn plants and has worked to address the FLA's concerns since.
Cook himself visited a factory in Zhengzhou, promising to actively oversee improvements. As Apple began to show increased interest, even the Chinese government took steps to placate its biggest contractor by vowing to crack down on Foxconn exploitations.
In response to these pressures, Foxconn raised wages from 16 to 25 percent as well as reducing the workweek to 48 hours. The company also has plans to hire thousands of new workers and improve employee housing conditions.
These measures are just a start, but Apple's recent campaign to improve Foxconn factories may eventually win the company points with its erstwhile detractors, but they come at a cost.
Apple warns its planned investment in Foxconn improvements may raise iPad and iPhone prices, which at first seems counterproductive to consumer relations.
But buyers are more likely to fork over cash if they can do so with a clean conscience, which consumers may think is worth an extra hundred dollars for the latest Apple gadget.
Apple plans to pay Foxconn half the cost of improving its labor conditions, as the company seeks to help Chinese workers while increasing overall consumer satisfaction.
Foxconn chief Terry Gou, speaking at his company's new headquarters in Shanghai, affirmed Apple's financial commitment to assisting its Chinese iPad and iPhone factories.
"We've discovered that this is not a cost. It is a competitive strength," Gou explained of plans to improve Foxconn working conditions. "I believe Apple sees this as a competitive strength along with us, and so we will split the initial costs."
Gou did not, however, disclose a specific dollar amount or show exactly where Apple would spend its money.
The idea of fair labor practices being a competitive strength for Apple nearly reverses the previous mindset of the Cupertino company, which first largely ignored reports from civil rights advocates and environmentalists about Foxconn's excessive overtime and unsafe working conditions.
But both the iPhone maker and its manufacturing partner now realize the negative publicity could tarnish Apple's reputation, as well as acknowledge many consumers care deeply about the provenance of their products' origins. Apple's abundant profits and huge cash chest -- juxtaposed with the persistent image of beleaguered iPad workers laboring in dangerous factories and strenuous conditions -- likely also created a contradictory tension many found difficult to reconcile.
Helping to shoulder the costs to address working conditions will likely be a wise investment on Apple's part, not only to help the workers that manufacture and assemble their products, but maintain their company reputation, especially as these issues continue to come under fire.
Some workers injured in factory explosions say they never received compensation, for example, while other employees committed a rash of suicides, reportedly in desperation over low wages.
In response to these incidents, consumer advocates like Change.org and Beijing's Institute of Public and Environmental Affairs condemned Apple for standing aside while its main supplier mistreated workers and polluted ground water.
But starting in February this year, Apple asked the Fair Labor Association to investigate alleged abuses at several Foxconn plants and has worked to address the FLA's concerns since.
Cook himself visited a factory in Zhengzhou, promising to actively oversee improvements. As Apple began to show increased interest, even the Chinese government took steps to placate its biggest contractor by vowing to crack down on Foxconn exploitations.
In response to these pressures, Foxconn raised wages from 16 to 25 percent as well as reducing the workweek to 48 hours. The company also has plans to hire thousands of new workers and improve employee housing conditions.
These measures are just a start, but Apple's recent campaign to improve Foxconn factories may eventually win the company points with its erstwhile detractors, but they come at a cost.
Apple warns its planned investment in Foxconn improvements may raise iPad and iPhone prices, which at first seems counterproductive to consumer relations.
But buyers are more likely to fork over cash if they can do so with a clean conscience, which consumers may think is worth an extra hundred dollars for the latest Apple gadget.
Apple announced better working hours at Foxconn factories, highlighting how the company intends to fulfill its pledge to improve after controversy erupted over labor conditions.
According to Apple's monthly report on work hours in supplier factories, the average workload at Foxconn dropped below 48 hours a week. Apple promised to further improve conditions and guaranteed continued updates at the Chinese factory, where many of Apple's top-selling devices are made.
The reduction in working hours coincided with production for Apple's new iPad, meaning Foxconn likely hired additional workers to make up for labor lost due to curbed overtime. Foxconn managed to produce enough tablets to sustain the 3 million sales generated during the debut weekend without resorting to excessive overtime, indicating the factory was able to maintain this balance during less hectic production periods.
Apple drew heavy criticism for the alleged abuses at its Chinese supplier factories, especially Foxconn. The New York Times talked to former Apple executives about the problems and Nightline ran a special highlighting dismal working conditions. Activists staged protests, gaining national attention lambasting the company for unscrupulous labor practices.
At first, Apple hesitated to respond, which drew more ire. Eventually Apple addressed criticism head-on, with CEO Tim Cook announcing wide-ranging, voluntary Fair Labor Audits and promising to rectify wrongdoing.
Apple's overtime update shows shorter working hours, demonstrating the company's push for fair labor practice is getting results, and the company intends to follow through with its investigation and take advantage of the positive press it yields from the facilities.
Proof that Apple's audits are working overlaps with reports that Mike Daisey, one of the company's most outspoken critics, exaggerated and made up information in his one-man Apple show. Despite the Daisey controversy, suspicions about Foxconn persist and Apple continues to take the allegations seriously.
Apple admits its factories need improvement, but these early strides will likely show critics the tech giant seriously intends to follow through with its promises and can balance working conditions with intense consumer demand.
Apple announced better working hours at Foxconn factories, highlighting how the company intends to fulfill its pledge to improve after controversy erupted over labor conditions.
According to Apple's monthly report on work hours in supplier factories, the average workload at Foxconn dropped below 48 hours a week. Apple promised to further improve conditions and guaranteed continued updates at the Chinese factory, where many of Apple's top-selling devices are made.
The reduction in working hours coincided with production for Apple's new iPad, meaning Foxconn likely hired additional workers to make up for labor lost due to curbed overtime. Foxconn managed to produce enough tablets to sustain the 3 million sales generated during the debut weekend without resorting to excessive overtime, indicating the factory was able to maintain this balance during less hectic production periods.
Apple drew heavy criticism for the alleged abuses at its Chinese supplier factories, especially Foxconn. The New York Times talked to former Apple executives about the problems and Nightline ran a special highlighting dismal working conditions. Activists staged protests, gaining national attention lambasting the company for unscrupulous labor practices.
At first, Apple hesitated to respond, which drew more ire. Eventually Apple addressed criticism head-on, with CEO Tim Cook announcing wide-ranging, voluntary Fair Labor Audits and promising to rectify wrongdoing.
Apple's overtime update shows shorter working hours, demonstrating the company's push for fair labor practice is getting results, and the company intends to follow through with its investigation and take advantage of the positive press it yields from the facilities.
Proof that Apple's audits are working overlaps with reports that Mike Daisey, one of the company's most outspoken critics, exaggerated and made up information in his one-man Apple show. Despite the Daisey controversy, suspicions about Foxconn persist and Apple continues to take the allegations seriously.
Apple admits its factories need improvement, but these early strides will likely show critics the tech giant seriously intends to follow through with its promises and can balance working conditions with intense consumer demand.
Samsung's paying out a bundle of money after the Korean Fair Trade Commission found it guilty of not only price-fixing, but impeding an investigation.
AT&T, though, is making plenty of money, marking record iPad sales over the weekend and announcing it's giving out $250 million in grants to help schools keep their students from dropping out.
Meanwhile, Mike Daisey, who gained attention as the so-called top expert on Foxconn abuses in China, is now saying his translator led him astray.
Korean Officials Fine Samsung For Blocking Investigation
The Korean Fair Trade Commission has fined Samsung the equivalent of $356,000 U.S. dollars for obstructing its price-fixing investigation.
The penalty is in addition to the $12.6 million the country's FTC fined Samsung for price fixing, bringing the total to nearly $13 million. According to Korea Joonang Daily, security guards met the FTC investigators when they arrived at the plant to go through Samsung's offices. In addition, employees were ordered to delete data and replace computers with important information.
Also, an executive said he was away on a business trip to avoid an interview, and by the time FTC officials made their way into the Samsung offices, only one employee remained.
The commission has issued a total of $40 million in fines to Korea's tech companies, accusing them of colluding to raise phone prices.
AT&T Fighting Dropout Rate with $250 Million in Grants
AT&T will spend $250 million to help reverse a U.S. student dropout crisis.
Company officials said the company chose to target school drop-outs in response for calls for more corporate philanthropy. The investment is one of the largest corporate investments ever made in education, and expands on a small program the company started in 2008.
Grant applicants must be able to prove they have a dropout-prevention program with a successful track record. Applications that have efforts connected to science, technology, math or engineering will rank higher for the grants, which will range from $100,000 to $300,000 each.
Discredited Daisey Points Finger at Translator
Actor Mike Daisey, who made a now-discredited name for himself by taking on Apple over its plants in China, is challenging the credibility of a little-known Chinese translator who worked with him.
The woman disputes many of his claims about witnessing inhumane working conditions at iPad and iPhone plants. Daisey has recently acknowledged making up several facts about his visit, leading National Public Radio to pull a top-rated report based on his documentation.
Daisey's one-man show, "The Agony and the Ecstasy of Steve Jobs," helped stir criticism of Apple and Foxcomm. However, rather than taking all the blame, he's now telling audience members he removed material he couldn't stand behind and informs the crowd that his recollections differ from his translator's.
AT&T Sets IPad Sales Record
Apple wasn't the only company making money from its new iPad launch last Friday, as AT&T said it set a record for the most iPad sales and activations in one day.
The Cupertino, Calif.-based company hasn't said exactly how many new iPad 2 tablets were sold last year, but some analysts estimated about one million units were sold on that device's first weekend -- meaning even more than a million new iPads may have been sold this past weekend, just after its launch.
At Apple's flagship Fifth Avenue store in New York city, an estimated 13,000 new iPads were sold during the first 12 hours of its launch, for an average of about 18 per minute. The store's daily revenue, usually falling between $700,000 to $1 million, was up to $11.5 million on launch day.
Apple Hits with Suit from Chinese Authors Over Piracy
A group of prominent Chinese writers want millions of dollars in compensation from Apple over allegedly selling pirated versions of their books in its iTunes store.
Twelve authors have filed three separate lawsuits in a Beijing court, saying 59 of their titles were sold unlicensed through Apple's iTunes online store. The three suits together demand $3.5 million from Apple.
The case is one of several legal battles for Apple in China. The company was recently targeted by Proview, a Chinese monitor and LED light maker, which says it registered the iPad trademark more than a decade ago and now seeks compensation as well from the Cupertino, Calif.-based company.
NPR radio show "This American Life" retracted its episode about Apple's factory abuses -- due to errors in fact-checking -- which triggered an outpouring of criticism and cast a negative light on Apple.
The program will air another show explaining what went wrong, detailing conditions of Apple's Foxconn factory in Shenzhen, China. Based on material from performer Mike Daisey, who wrote a one-man-show entitled, "The Agony and the Ecstasy of Steve Jobs" the episode described visits to factories in Shenzhen.
The program, which put Apple's treatment of workers under a microscope, fueled a backlash against the company from journalists, regulators and consumers. Now, This American Life says it isn't standing behind the report, due to exaggerated details, since Daisey's script was part of a monologue for performance purposes.
When the story, "Mr. Daisey and the Apple Factory," aired in January, it become the most popular podcast in This American Life's history, with 888,000 downloads and 206,000 streams, suggesting many listeners may be troubled by its presentation as fact.
When fact-checking the story, producers couldn't track down Daisey's interpreter. In a statement, the show explained it went along with the report because other parts of it checked out, though host Ira Glass says "at that point, we should've killed the story."
Meanwhile, a "Marketplace China" reporter, Rob Schmitz, heard the story on the radio and noticed some peculiarities of his own. For example, in one part, Daisey talks about meeting a group of workers poisoned on an iPhone assembly line. Apple's audits showed the incident occurred in another factory -- nearly a thousand of miles from the one Daisey visited. Schmitz says he wondered how Daisey could have interviewed the injured workers in Shenzhen.
Schmitz investigated, and found the real interpreter Daisey worked with who was able to disprove a series of events, like a dramatic moment where a worker with a mangled hand from a factory incident used Daisey's iPad for the first time. Other fabrications included the number of factories Daisey visited, meeting underage workers and how many workers he interviewed.
"I suspect that many things that Mike Daisey claims to have experienced personally did not actually happen, but listeners can judge for themselves," Glass said. This American Life, an acclaimed program which airs on NPR, is produced by WBEZ Chicago and distributed by Public Radio International.
This American Life may have sparked this latest round of scrutiny for Apple, one of Foxconn's biggest customers, but many other reports came forward, like a front-page investigative series by The New York Times where former executives say poor working conditions were known for years.
During this whole ordeal Apple CEO Tim Cook contended his company believes every worker has a right to a fair and safe workplace. Attempts to save their reputation followed, with a raise for workers, third-party environmental audits and arrangements for Fair Labor Association investigations.
Other factors contributed to a review of Foxconn months before the radio broadcast, like the deadly explosion in May 2011 and a rash of employee suicides blamed on poor wages and long hours.
Recent examinations of the plant may not be in error, but Daisey's report was based on incorrect information, and may have contributed to other potentially flawed portrayals. Daisey admits fault for presenting his performance as fact, but his words have now given thousands of people images of Apple conditions that could be false.
"What I do is not journalism," he said. "The tools of the theater are not the same as the tools of journalism. For this reason, I regret that I allowed 'This American Life' to air an excerpt from my monologue."
This American Life's portrayal of Foxconn working conditions contained flaws, but it did bring light to a shadowy situation as the world listened in. And now, pending audits and investigations will glean first-hand knowledge for involved agencies to gauge the situation with accuracy.
Chinese factory workers say Apple overlooked safety hazards after an explosion last December, as the company struggles to maintain its reputation amid mounting public concern.
The explosion, which injured 59 workers, happened at a plant run by Pegatron subsidiary Riteng Computer Accessory Company, a producer of panel parts for Apple's iPad, among other products. NPR interviewed Pegatron workers on Monday, revealing conditions still need improvement and Apple failed to follow through with workers after the accident.
The timing of the news is particularly bad, arriving just before the release of the new iPad later this week and darkening the positive spin Apple attempted to put on earlier allegations of unsafe working conditions. The company recently agreed to both interior and third-party audits of its plants, promising major improvements as attention heats up over its labor practices.
Apple's Pegatron investigation last year uncovered a massive buildup of dust from aluminum particles, and workers say dust was a serious problem in the factory. "We wore face masks, very thick masks," said worker He Wenwen. "But when we took them off, our nostrils were full of dust. The air in the factory looked a bit like fog."
The explosion occurred just hours after a site visit from Apple and its inspectors, during which employees were reportedly told to clean up as much of the dust as possible and not to speak to the visitors.
Workers at Pegatron also say they were never warned about a similar explosion at fellow manufacturing plant Foxconn seven months earlier that left four workers dead and fifteen injured.
"When we first got here," Zhang Qing, a Pegatron employee, told NPR, "they never told us this could explode."
In response to public scrutiny over poor working conditions last month, Apple CEO Tim Cook said the company "takes working conditions very seriously and we have for a very long time." But the 25 injured workers who spoke to NPR say they weren't contacted or compensated by Apple until after the interview aired on Monday.
News of unsafe working conditions overseas is also leading to questions about why Apple outsources so many of its manufacturing jobs. Last week, Apple said it created more than half a million U.S. jobs, and announced a massive expansion of its Austin, Texas-based facility that will create another 3,600 positions over the next ten years.
Despite the damage control, reports keep mounting about overlooked safety issues abroad, and Apple's reputation could suffer as a result, especially as the company gears up to launch the new iPad and Apple TV.
The Apple-Samsung battle heats up, RIM's BlackBerry loses a key sector of customers and other stories from today's news.
Patent Wars: Apple Says Samsung Violated Court Order
Apple is accusing Samsung of only complying partly with a court order that requires it to offer source code for its 4G smartphones and Galaxy tablets involved in its U.S. patent lawsuit filed in California.
The U.S case is just one of dozens of similar lawsuits filed between Apple and Samsung, as the two tech giants hurl accusations about violating each others' patents and designs.
Got a Penny? Get a 4G Smartphone
Several Sprint 4G smartphones are on sale for just a penny on Amazon, with a new activation. The sale runs through March 26, but if you buy your phone by March 19, you'll get free activation.
The phones include a few Galaxy S2 and Evo 3D devices, among others. Buyers will have to switch from their current carriers, and people using Sprint plans need to pay an extra $10 for 4G speed.
Jobs Courted CBS for Streaming TV
CBS CEO Leslie Moonves revealed during a talk at the UCLA Entertainment Symposium over the weekend that he had spoken with the late Steve Jobs about providing content for a subscription-based video service, but declined the idea.
Had the talks been successful, Apple TV, the set-top box that allows viewers to stream programs through the Internet, could have gotten a boost over its competitors, including Netflix, by being able to stream network programming earlier in the game.
Samsung Selling 3 Times More Phone Than Apple in China
China Telecom began selling the iPhone 4S last week, but the deal may be too late for Apple to catch Samsung, which has a market share that's three times larger and still growing.
Apple also limited itself by not making a device compatible with the nation's largest carrier, China Mobile, meaning the iPhone -- even newer models -- may not catch up with Samsung in China, despite the love the Chinese have for Apple's smartphone.
Capitol Hill Switching Off BlackBerry
BlackBerry, once the undisputed leader on Capitol Hill, is losing traction as D.C. staffers are switching over to iPhones. The BlackBerry is still the top smartphone in Washington, but its lead is deteriorating fast, according to the National Journal.
Most alarming of all, less than one percent of all groups polled said they planned to buy a new BlackBerry, while most would buy an iPhone.
Carlos Slim Financing Internet TV Network
Mexican billionaire Carlos Slim, the world's richest man, is financing an Internet TV network that will include an interview show with retired CNN host Larry King.
As more people switch to using their tablets and smartphones for Internet use, Slim's new venture could put millions more dollars in his pockets, particularly if advertisers sign on.
China's government is looking into a crackdown on Foxconn worker abuses, building on efforts by Apple and human rights activists to address the company's labor practices.
Chinese Labor Minister Yin Weimin said he will "step up guidance on companies" suspected of neglecting worker health and safety, warning lawbreakers will be "severely investigated and dealt with."
"Problems exist at some companies, for example excessive overtime, too low pay for some workers and a lack of concern for people," Yin said. "Relevant government departments and unions will increase their supervision and management when it comes to these issues."
Yin didn't specify Foxconn as a target, but the electronics manufacturer remains at the forefront of investigations groups following reports of unsatisfactory working conditions.
Apple CEO Tim Cook last month encouraged the Fair Labor Association to audit its supplier Foxconn, pledging to change factory policies in response to the FLA's findings.
"We believe every worker has the right to a fair and safe work environment free of discrimination, where they earn competitive wages and can voice their concerns freely," Cook said. "Apple's suppliers must live up to this to do business with Apple."
Cook's agreement to investigate Foxconn prompted the manufacturer to immediately increase wages for its employees, though other issues like overtime, physical safety and child labor have yet to be addressed.
Apple's willingness to involve the FLA follows two years of pleading from human rights groups, who cited numerous worker suicides, chemically induced illnesses and explosions, and 60-hour workweeks as reason to question the company's working conditions.
Stories of cramped living conditions in factory barracks, corporal punishment from supervisors and a lack of living wages continue to plague Foxconn, which in turn reflects poorly on Apple.
But now that the Cupertino, Calif.-based company is taking a hard look at Foxconn, change could be in the air. Apple's public support for the FLA investigation makes it difficult for China to ignore Foxconn's labor violations since the country's economy relies in part on Apple's satisfaction with the often controversial supplier.
Chinese workers may not organize under the country's labor laws, but if Yin's statements reflect his government's intentions, Foxconn may experience a top-down overhaul yet this year.
A Shanghai court ruled Apple can continue to sell the iPad in China, as a lawsuit over trademark threatens to disrupt the company's success in the country.
Chinese manufacturer Proview's claims of trademark infringement led some stores to pull Apple's iPad from shelves. However the court's most recent ruling is an indication that it will be difficult for Proview to receive what it truly wants, a full ban of the product in China.
China's customs division told Proview CEO Yang-Long-san a block on Apple's products will not happen because of how popular they have become in the country and the benefits the strong sales have in the nation.
However, Proview continues to file claims against Apple to make the iPad maker's road to dominance in China as difficult as possible, and is now looking to bring its case to other countries as well.
"We bought Proview's worldwide rights to the iPad trademark in 10 different countries several years ago," an Apple representative said to CNET. "Proview refuses to honor their agreement with Apple in China."
Despite Proview's plans to extend its lawsuit against Apple in the U.S, the Chinese company is not likely to cause any damage in the iPad maker's home market. Still, Apple's careful handling of Proview's lawsuit acknowledges there is a lot at stake for the California company in China.
Apple has three flagship stores in Shanghai, which experience heavy traffic, and the Chinese market has quickly emerged as its most successful outside the U.S.
China is also the home of Apple's factories, where the large bulk of the company's products are manufactured. These same factories have been the subject of much scrutiny lately due to poor wages and working conditions, and have garnered the attention of the New York Times and ABC's "Nightline: Evening News" program.
Apple likely decided it is beneficial to keep the company's battle with Proview as low-profile as possible so it does not further aggravate reports about its factories and risk hurting its growing business in China. However, despite remaining relatively low-key against Proview, Apple will not risk losing the crucial iPad branding.
Apple will likely establish a defense against Proview as the suit now reaches the higher Chinese court in Guangdong, and if by some chance the company does lose the case, it will pay whatever fee the judge demands to keep the iPad name.
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