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Case Details

Case Code: BECG163
Case Length: 21 Pages 
Period: 2007-2018   
Pub Date: 2019
Teaching Note: Available
Price:Rs.500
Organization : Apple Inc
Industry :Technology
Countries : -
Themes: Corporate Sustainability/ Corporate Social Responsibility/ Planned Obsolescence/  Climate Change/ Triple Bottom Line
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Planned Obsolescence: Undermining Apple`s Commitment to Sustainability?

 
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EXCERPTS

COMMITMENT TO SUSTAINABILITY

 

Since taking over as Apple’s CEO, Cook had made protecting the planet a prominent part of the company’s identity. Under Cook, Apple not only recognized that climate change was a real problem, but publicly committed Apple to powering its data centers and other operations with 100% renewable energy to address the problem.

In 2013, Apple hired environmental policymaker Lisa Jackson (Jackson) as the company’s Vice President of Environment, Policy, and Social Initiatives. By 2013, Apple’s data centers were powered entirely by renewable energy sources – specifically, solar, wind, hydro, and geothermal. Overall, 75% of the energy used by the company’s corporate facilities globally were renewable – up from a mere 35% in 2010...

 
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APPLE’S PLANNED ABSOLESCENCE

According to analysts, Apple had made commendable progress on the climate change front. Under Cook’s leadership, the company was committed to protecting the planet by reducing the environmental impact of its products and operations, reducing its greenhouse gas emissions, and eliminating the amount of toxic substances in its devices (See Exhibit I and Exhibit II). “We’re committed to leaving the world better than we found it. After years of hard work we’re proud to have reached this significant milestone. We’re going to keep pushing the boundaries of what is possible with the materials in our products, the way we recycle them, our facilities and our work with suppliers to establish new creative and forward-looking sources of renewable energy because we know the future depends on it,” said Cook...
 

THE IPHONE THROTTLING CONTROVERSY

Apple released a new version of its mobile operating system, the iOS, every year. The new iOS, which had more features and required more computing power, worked best on the new iPhones. Generally, users tended to complain about old iPhones slowing down whenever a new model of the iPhone was launched. In 2015, a class action lawsuit lodged with a New York district court claimed that Apple engaged in planned obsolescence, and alleged that the company had issued an iOS 9 software update that slowed down iPhone 4s models with aging batteries. ..
 

ENVIRONMENTAL IMPLICATIONS

According to experts, planned obsolescence would have negative implications for the environment. Apple was encouraging a culture of consumption that would significantly increase mining and procurement for the materials needed to manufacture devices, thereby intensifying the toll their production would have on the planet’s finite resources and their contribution to overall GHG emissions . Elements like gold and copper were present in the body and circuitry of the iPhone; lithium and cobalt in the battery; and neodymium in the magnets. Indium formed a transparent conductive layer on the touchscreen...
 

HUMAN COST

The massive factories that assembled iPhones, iPads, and other devices for Apple in China faced accusations of labor abuse, poor working conditions, and harsh penalties for workers who made mistakes. The workers often worked up to 10 hours a day in hot workshops, handling noxious chemicals – sometimes without proper safety masks. Reportedly, some suppliers illegally used student labor in China to fulfill iPhone X Orders. Apple also faced allegations of forcing its workers to endure sweat shop conditions that led to a spate of suicides at Chinese factories that assembled iPhones. Though Apple developed standards and started audits of suppliers, the sheer scale of its supply chain, as well as difficult to quantify variables such as such as living standards and sanitation, made monitoring difficult..
 

THE ROAD AHEAD

With the Right to Repair movement gaining momentum, Apple appeared to be moving toward a more customer-friendly iPhone repair policy. According to a presentation, titled “Apple Genuine Parts Repair” dated April 2018, the company had begun to give some repair companies access to its diagnostic software, a wide variety of genuine Apple repair parts, and repair training. And notably, it was placing no restrictions on the type of repairs that independent companies were allowed to do...
 

EXHIBITS

Exhibit I:Apple’s Environmental Strategy
Exhibit II:Apple Inc. Product Environmental Performance Indicators
Exhibit III:Product Repair Score Card (By Greenpeace)
Exhibit IV:Greenpeace’s Guide to Greener Electronics 2017: Company Report Card.
Exhibit V:Life Cycle of Apples’s Devices
Exhibit VI:Searches for “iPhone slow”
Exhibit VII:Greenhouse Gas Emissions for iPhone
Exhibit VIII:Apple Inc. Condensed Consolidated Statements of Operations (Unaudited)