Brief introduction to Apple In.
Apple Inc. is an American high-tech multinational corporation engaged in researching, designing and producing electronic technology products (Wikipedia, 2013). In 2007, the company changed the name from Apple Computer Inc to Apple Inc. headquartered in Cupertino, California (Wikipedia, 2013). The company was established on April 1st, 1976 by Steven Paul Jobs, Stephen Gary Wozniak and Ronald Gerald Wayne (Wikipedia, 2013). Apple Inc. is popular for its unique innovation and mind-boggling development rate. The products include the Mac line of computers, the Apple TV device, the iPhone smartphone, the iPod music player and the iPad tablet computer (Wikipedia, 2013). In addition, Apple Inc. has developed over 850,000 kinds of unique App software (Apple Inc., 2013), two practical online shops (iTunes Music Store and Apple App Store) and simple operating systems (OS X and iOS) for customers. In recent years, Apple has been a hot topic of concentration for people all over the world. In this essay, I’d like to explore why and how Apple has become a successful media institution through analysis of the globalization and ideology of Apple. Furthermore, I will discuss the situation of Apple in China.
The Globalization of Apple
Croteau, Hoynes and Milan (2011) say globalization “involves a number of ongoing interrelated processes, including the internationalization of finance and trade (p. 326).” Due to the development of globalization, Apple increased its profits. In America’s earlier years, the car was a key to the U.S. economy. Today,a new economy structure has emerged in part due to Stew Jobs (former CEO of Apple) who helped lead the U.S. technology market to the top (The New York Times, 2011). In the global market, Apple has succeeded exceptionally in terms of advanced strategies, which utilize most frequently on foreign outsourcing, importing and exporting (Lo, 2008).
As of July 2013, Apple has developed 417 retail stores in 13 countries and an online store available in 38 countries with global sales of $16billion dollars in merchandise in 2011 (Wikipedia, 2013). As a multi-national corporation, Apple Inc has realized the significance of globalization by spreading all over the world.
In the first two quarters of the 2013 fiscal year, revenue of Apple has grown at14.73% to $98.115 billion dollars (Leitao, 2013). We can see by referring to on the left graph that the percentage of recognized revenue contributed by each of Apple’s six regional revenue segments in the first six months of the current fiscal year are widespread (Leitao, 2013). Only 35% of Apple’s recognized revenue was sourced in America. Except in retail stores, Apple’s revenue highly depended upon performance in overseas markets.
Moreover, Apple is good at seizing opportunities in the global market. For example, Apple and China Mobile (the world’s largest mobile carrier with 740 million subscribers) have been working on an iPhone distribution agreement for more than six years (DeWitt, 2013). They promise to make an agreement in order to collaborate with the iPhone5C although Apple has already worked with the second and the third biggest China mobile carrier- China Unicom and China Telecom for several years. If Apple cooperates with China Mobile, the revenue of Apple will grow much faster, and Apple will benefit more in the global market.
The Globalization Effect of Apple
Apple Inc. is a creative corporation, not a production company. Although Apple has profited over $400,000 dollars for each employee in 2011, it has provided few opportunities to work in America (Bello, 2012). For example, Apple mainly relied on foreign outsourcing in order to market the iPod (Lo, 2008). In 2006, Apple employed nearly twice as many people outside of America to produce iPod. The workers were 13,920 in the United States, and 27,250 abroad; 12,270 were in China and 4,750 were in the Philippines (Freeland, 2011). Apple has gradually become a visional company that offers work to people outside of America. On the other hand, those 13,920 American workers earned nearly $750 million, but the 27,250 employees outside of American Apple took less than $320 million (Freeland, 2011) home. Thus, in this institution, the biggest winners are Apple and Apple’s shareholders who earned significant money from globalization.
In addition, there are almost half of the iPod overseas workers (12,270) are in China (Freeland, 2011) This is because Apple favored China with large amounts of cheap and disciplined labor. However, based on Marxism, which is the theoretical root of ideological analysis, the core of capitalism is exploiting workers in order to maximize profits (Croteau et al., 2011). In order to find more efficient and cheap forms of production, Apple bargains hard to allow its contractors to have slim profits. This often leads to suppliers often cuting corners by using cheaper alternatives and exploiting laborers’ interests. One former Apple executive said, “If you squeeze margins, you’re forcing them to cut safety” (Bello, 2012). A number of workers have to face security and survival problems because they have to work in an unsafe working environment with gradually increasing workload and less remuneration, including explosion, poisoning and suicide.
The Nobel economics laureate A. Michael Spence explains the same phenomenon: “Globalization hurts some subgroups within some countries, including the advanced economies. The disparities in income becomes much and employment has been reduced across the U.S. Highly educated workers enjoy more opportunities and workers with less education are facing declining employment prospects and stagnant incomes” (Freeland, 2011).
The Ideology of Apple
Why does Apple have significant success in the global market? In the beginning, Apple focused on high end technology products and the development of consumer technology. As we all know, Apple doesn’t design various categories of products in the same product area. Apple expects their own products to become “the leader” in each field. None of the popular mobile phone makers are similar to Apple in business strategy, which can survive with only one product in the mobile arena. Thus, Apple pays more attention to provide remarkable user experience for its customers by improving and innovating original products in terms of hardware and software. Apple focuses more on quality and in-depth research to extend the function of their products rather than product variety. The more professional the Apple products are, the more consumers will be attracted to them. That is one of the most important reasons why there are so many people in the global market fascinated by Apple products familiar.
Furthermore, with the globalization of culture, use of Apple products have caused a culture phenomenon-fetishism. More and more people think it is a trend and fashion to use Apple. They overstate the meaning of Apple products. Some media often report people want to buy an Apple product for selling their body apparatuses, such as kidney. The brand effect causes consumers to blindly pursue for a certain product with an undeserved price. Sometimes, Apple would adopt restriction on purchases while the new products launched. Then, people will be willing to pay twice or triple the price for a new Apple product. For instance, the two pictures below (ZhongXin newspaper, 2012) shows Chinese market in Beijing on January13, 2012 when the iPhone 4S came out for the first time. Apple officials had implemented restrictions on iPhone 4S before it started to sell, but there were still too many frenzied buyers, including Apple fans and scalpers, who snapped up the iPhone 4S with a smashed accident caused when Apple officials stopped offering products for sale. Out of frustration, consumers had to buy iPhone 4S from scalpers with a higher price.
The fetishism of people for Apple is increasingly becoming common, particularly for young people. Through the fetishism phenomenon, we can see the effect of Apple when is significant around the world.
In my opinion, globalization and ideology are two important factors of Apple that interact with each other. The ideology of Apple requires that the engineers pay more attention to improve their product’s performance and service. Then, they distributed their merchandises throughout a global trade. More and more consumers will provide their experiences and suggestions to help Apple perfect their products. The process of interaction is a circulation in order to make Apple more successful.
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Croteau, D., & Noynes, W., & Milan, S. (2011). Media society: Industries, images, and audiences (4th Edition).Thousand Oaks, CA: SAGE Publications, Inc, 2012.
DeWitt, P, E. (2013, Dec. 2). Has China Mobile quietly begun taking pre-orders for Apple iPhones? CNN Money. Retrieved from http://tech.fortune.cnn.com/2013/12/02/apple-china-mobile-suzhou/
Freeland, C. (2011, Jun. 30). How the iPod explains globalization. The New York Times. Retrieved from http://www.nytimes.com/2011/07/01/world/asia/01iht-letter01.html?_r=0
Leitao, R, P. (2013). Where in the world is Apple’s growth? Post at Eventide. Retrieved from http://www.postsateventide.com/2013/05/where-in-world-is-apples-growth.html
Lo, C. (2008). Global outsourcing of FDI: How did apple launch its ipod? Retrieved from http://www.docstoc.com/docs/43839664/Global-Outsourcing-or-FDI-How-Did-Apple-Launch-its—PDF
Sohail, N. (2011). Impact of globalization on Apple Inc. Scribd. Retrieved from http://zh.scribd.com/doc/61951649/Impact-of-Globalization-on-Apple-Inc
Wikipedia. (2013). Apple Inc. Retrieved from http://en.wikipedia.org/wiki/Apple_Inc
ZhongXing Newspaper. (Jan 14, 2012). iphone 4S event. People. Retrieved from http://world.people.com.cn/GB/157278/16875130.html