Customers aren't taking much action following reports about Apple suppliers' questionable labor conditions.
NEW YORK (MainStreet) -- The scene could easily have been the start of an Apple(:AAPL) commercial: Mark Shields was making hummus in the kitchen earlier this month listening to NPR's "This American Life" streaming through his Apple Airport and playing on his Mac laptop, while his iPhone sat on the counter nearby. However, this particular program happened to be about the controversial working conditions at Apple's manufacturing center in China.
As he listened to the stories of factory employees -- some of them underage -- literally working around the clock and putting their health in danger all for inadequate wages, Shields and many others listening were forced to think differently about the gadgets and the company they'd come to love. Customers aren't taking much action following reports about Apple suppliers' questionable labor conditions.
"I had never really thought about how the Apple products were made. I just assumed a lot of it was done by machines, not people -- let alone people who were treated so badly," says Shields, a communications professional with the consulting firm Spitfire Strategies. "I love Apple and I love what it stands for. I want them to do better."
In an effort to improve this situation, Shields decided to post a petition to the Web site Change.org on Thursday calling for Apple to be more transparent about these labor violations and to come up with a "worker protection strategy for new product releases." Since then, more than 130,000 people have signed the petition.
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Shields' effort is notable both for how quickly it has gained traction and for how rare it is. There have been a handful of other examples in recent years of people petitioning Apple to improve its manufacturing practices -- including less popular petitions on Change.org and a small protest from a group called the Chinese Progressive Organization -- but these have been few and far between. Shields' petition happens to come at a time of renewed interest in Apple's labor practices, driven in part by the NPR piece and a series of stories this week in The New York Times, but as popular as the petition is, it still represents just a small fraction of Apple's overall customer base.
This is especially surprising at a time consumers have shown their willingness to mobilize and fight back against other companies any time they raise a fee appear to take advantage of customers. According to several analysts we interviewed, though, manufacturing issues are generally not as ripe for consumer outrage as price hikes or service changes.
"For better or worse, these global manufacturing issues affect not just Apple products, but pretty much all consumer electronics, as well as clothing, shoes, automobiles," says Michael Gartenberg, a technology analyst with Gartner, alluding to the fact many companies (including several of Apple's competitors) rely on similar labor conditions in China and other countries. "It may just have come to the point where consumers accept this realization that a good deal of the things they consume have been produced overseas."
Tim Bajarin, principal analyst with Creative Solutions, puts it a little more bluntly. "In the end, the consumer wants the product and he wants it cheap," he says. "Unless the actual human toll is directly affecting the consumer, our nature tends to be to see what's being done to correct it and then get on with our lives."
That may be particularly true of Apple, whose products are so incredibly coveted that it's hard to imagine consumers boycotting the company en masse. In fact, Abe Sauer, a writer with Brandchannel.com, argues that many consumers view Apple -- consciously or not -- as more of a religion than a brand, which makes it that much harder to sever ties with the company.
"The Apple brand occupies a space more like a religion than a regular consumer brand," Sauer says. "People may blow hot and cold with a product, but it takes a lot to make them turn on a held belief system. That is to say, if Apple is 'bad,' and I believe in Apple as part of my lifestyle, there must be something about my lifestyle that is 'bad.' Brains will resist that if at all possible."
To be sure, Apple customers do occasionally gripe about products and services -- the most notable example in recent memory being the antenna problems on the iPhone 4 -- but even these situations haven't affected actual sales. With that in mind, most of the analysts we spoke with argued that it would take more than just a few articles about labor conditions far away from here to have any noticeable impact on customer buying decisions, something that really speaks to the "human cost" Bajarin referred to. As an example, Sauer suggests that videos and photographs of the labor conditions would likely do more to create some consumer backlash, though even then it's unclear how badly Apple's reputation would be damaged.
Bajarin and others argue that Apple has managed to defuse the potential outrage to date in part by taking steps to rectify it, including implementing a code of conduct for its manufacturers as well as auditing and disclosing the names of these suppliers. Apple's CEO Tim Cook even went so far as to send out a letter to employees in response to the recent wave of reports highlighting the company's efforts to improve its manufacturing practices.
"Unfortunately some people are questioning Apple's values today, and I'd like to address this with you directly," Cook wrote in the letter. "Every year we inspect more factories, raising the bar for our partners and going deeper into the supply chain. As we reported earlier this month, we've made a great deal of progress and improved conditions for hundreds of thousands of workers. We know of no one in our industry doing as much as we are, in as many places, touching as many people."
To the extent that Apple continues to highlight its efforts to improve working conditions, it may remain insulated from any larger backlash. Yet there will likely always be those like Shields who feel more changes are needed. As he points out, the company that has nearly $100 billion in profits and is responsible for revolutionizing several major industries should be more active in "revolutionizing the way these factory workers are treated."
For the time being though, even Shields isn't quite ready to stop shopping at the company.
"I've got to admit, I would like to buy an Apple TV, but this is giving me pause," he says.
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