In addition to addressing their own supply chain, Apple encouraged “good and green” conditions at those suppliers that feed their supply chain. Apple hoped that other companies in China would adopt the model used in their supply chain. Apple “will encourage others to join in making smart investments in clean energy to match consumption.” Foxconn, for example, announced plans to build huge solar panel facilities, and announced tie-ups with other suppliers that will help build solar energy projects.49Will Apple’s focus on “green” provide sufficient evidence of corporate responsibility for its customers?Counterfeits and CopycatsApple experienced numerous problems associated with intellectual property (IP) leakage ranging from coun-terfeit products sold on the gray market to industrial espionage. As revealed earlier, Apple relied predominantly on Foxconn for sourcing components, manufacturing products, and more recently for some aspects of R&D. Foxconn serves other smartphone, computer, tablet, and accessory manufacturers—those with which Apple competes—such as Xiaomi. An examination of Xiaomi’s component sourcing practices revealed opportunity for the leakage of common parts and processes from Apple to an indigenous competitor. Xiaomi sourced many core smartphone components from Apple’s suppliers and contracted with the same smartphone assemblers to make them. This document is authorized for use only by Ekaterina Prytkova ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.
11 A04-16-0003Apple faced IP challenges regionally. In 2011, Apple claimed that Samsung had copied their iPhone design and sued them in the U.S. courts. The court found in favor of Apple and in 2012 ordered Samsung to pay US$1 billion in damages. Samsung appealed and the damages were reduced and split into two—US$548 million for technology patents that the court found Samsung copied, and US$382 million for the package design that the court found were also copied. In December 2015, Samsung agreed to pay Apple US$548, one part of the settle-ment upon receipt of an invoice. Disposition of the remainder was still tied up in the courts by 2016.50Fake Apple StoresPulled by the demand from customers who sought the face that Apple products would give them, counterfeit Apple stores began popping up around China—in some cases reselling actual Apple products from factory overruns.51Bloombergreported in mid-201152that Chinese authorities investigated 300 counterfeit shops for licenses. After this investigation, Chinese officials closed two shops for the unauthorized use of the Apple logo. The authorities identified 22 additional shops that used the Apple logo without Apple’s permission; these were not closed because the shops had operating permits. The government closed 1.6 percent of the shops investigated. About 47 percent, or 502,900 iPads, sold in Q2 2011 through retail stores were not authorized by Apple.
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- Fall '08