Apple

The Iphone is a line of smartphones designed and marketed by the Apple Corporation. It offers a lot of services (you can call, listen to music, go on the internet, play game, take videos....). It was, on July 29th, in 2007, the most sophisticated mobile phone and it is still one of them. Apple Incorporated is an American multinational corporation and it is the world's third largest mobile phone maker. In 2010, Apple's worldwide annual revenue totalled 65 billion dollars. It is the largest publicly, traded corporation in the world by market corporation and my market capitalization, with an estimated value of 626 billion in September 2012. The historical background of the creation of Apple and of the Iphone is in fact quite complicated. It is tied to the internet, which is tied to the desire to have an efficient defense system which would allow the United States to react immediately to an air attack. First, in 1958, the air defense requires a vast national communication network, and in 1960, Arpanet, the internet ancestor, is launched by the US. Then, in 1973-74, all the communications networks in the US are combined and associated with the British version of Arpanet, and formed the Internet. All these intensive research and defense efforts are the background of the internet we know, and of Apple. In the 1970s, in North America, people with capital were trying to find a way to invest in the communication network. These investors sensed opportunities in this, because it makes communication possible, and several of them helped Apple, Steve Jobs and Steve Wozniack. It is in this context, in 1976, that Apple was created with the Apple C, a personal computer kit. In 1979, US corporations developed their own networks to catch household interest, to provide online services like online market. This opened a huge market of computers and a massive demand for them, which helped Jobs and Wozniack a lot. In 4 years, they became millionaires. The enormous capital lent to Apple by two global banks in 1980 was invested in development programs and innovations. It allowed Apple to release new models virtually every tow years. It is in this context that the Iphone was Apple's Flagship product in 2007. In 2007, Steve Jobs presented the Iphone. With this invention, Apple reinvented the phone. The Ipone can be considered as a combination of the Ipod (music), cell phones and Internet devices (e mails, news...) The Iphone allows Apple to fight customers'boredom. Jobs reacted like the perfect business man, because he created new needs in consumer thoughts. Until Jobs came up with the Iphone, no one wanted or needed one. Now, everybody wants one. Steve Jobs watched out for the tipping point in previous products and started new product lines in order to continue to profit. The Iphone is one of the perfect examples of the global division of Labor. It is designed in California, in America, which is an economy based on creativity, design and innovation, but it is made in China, which is an ecoomy that manufactures designs/products, invented by others. There are five important countries who contribute to the Iphone. Three of those are Asian, and they represent 50% of the costs of an Iphone. This illustrates the weight of Eastern Asia and global manufacturing, particularly because the two others are Germany and the United States. The Iphone is made in China, Stentzen, at Foxconn. At Foxconn, the Iphone is essentially made by hands. There are just a few automated systems. The workers here appear to be extensions of speaking robots, they are silent and follow orders. They work 12 hours a day, and they earn 22.60 dollars a day. The workers are mostly youngs, and they live at Foxconn. They repair in dormitories where they are accommodated 8 a room. At Foxconn, the conditions are better than we would think. Everything is clean, workers have proper facilities (restaurants, sports grounds...) But a few months ago, some workers killed themselves because of their working conditions, so Foxconn doubled wages and installed nets to protect workers against themselves. Such hard conditions are possible in Asia, because of their culture, based on Confucianism. But the leaders seem to care about their workers, so they are not too hard (or they think they aren't). There is also a big contrast between Foxconn conditions and the village the workers come from, shanty town conditions, and the fact that they work at Foxconn helps their family financially. Apple has a large part in the US trade deficit, with the Iphone, even if they designed the Iphone. The Iphone is made in China, but China doesn't have money to buy it. It is generally the case that China cannot buy what it produces and the Iphone is mostly bought by Americans. So Apple must import a lot for that : for the Iphone, they import 2 billion dollars worth and they only export 120 million dollars. So the Iphone alone generates 1.8 billion dollars in trade deficit for the US. But even with a great trade deficit, the US can continue to expand its imports so much because the dollar is the international currency, so most of the exchange between countries is made with dollars. Everybody wants US dollars.