Posted on 03/06/2014 1:54:22 AM PST by Swordmaker
Apple’s normally soporific annual shareholder meeting contained a glimmer of interest this year when a shareholder from a conservative think tank asked the company to stop worrying about sustainability, green issues, and climate change and concentrate instead on the bottom line of profitability.
Tim Cook essentially told his interrogator from the National Center for Public Policy Research to go boil his head, which is nice of him and provides good copy. But this fails to elucidate the dilemma that Cook actually faces. He is indeed focusing on the bottom line by taking the actions that he does on these very issues. It’s just that he can’t actually stand up and say that.
As reported in The Mac Observer:
[Cook] didn’t stop there, however, as he looked directly at the NCPPR representative and said, “If you want me to do things only for ROI reasons, you should get out of this stock.”It was a clear rejection of the climate change denial, anything-for-the-sake-of-profits politics espoused by the NCPPR. It was also an unequivocal message that Apple would continue to invest in sustainable energy and related areas.
The other shareholders clearly agreed that such issues should continue to motivate Apple’s actions: 97 percent of them voted against the original proposal that the company should not take regard of these matters.
And yes, sure, I sign up to Milton Friedman’s idea that a company should be viewed as having one purpose and one purpose only, which is to enrich its shareholders. With a couple of obvious caveats, legality for example, playing their part. However, and here’s the dilemma, it’s not actually obvious that Apple’s activities in green and climate change matters do not in fact add to the bottom line.
Let’s think through the things that it actually does. First, its commitment to the use of renewable energy. Whether solar and Bloom Boxes at the data centre in North Carolina, or in their other offices, there’s no indication that this costs more than other energy sources. Sure, green power isn’t economically viable in most places (although in some locations and uses it is) but it’s not actually the consumer of the power that ends up paying that extra cost. Subsidy systems vary but almost all of them have either the taxpayer or all power consumers paying the extra costs. Things like feed in tariffs and guaranteed prices for renewable electricity mean that all power consumers on the grid are paying the higher costs of that type of power, not just the people who are saying that they’re using green power. So while society as a whole might be paying some extra amount for Apple to be using renewables it’s not in fact Apple that is.
Given my background in the minerals trade I’m also interested in Apple’s work on conflict minerals. Yes, the company just announced that its tantalum supplies (used to make capacitors) are now free of material sourced from slaves and child workers in the DR Congo. But it’s worth noting that it’s done this the cheap and sensible way, through the industry smelter initiative, not the expensive and stupid way proposed by the Enough Project and Global Witness and written into Dodd Frank. A few millions (and it won’t have been more than that) to gain the marketing and bragging rights to being conflict free could very well add, not detract, from the bottom line.
There are, however, other areas where Apple clearly doesn’t take the environmentally righteous path. For example, all iPads and iPhones are flown from the manufacturing plants to the distribution warehouses. The reason is that the interest on stock is higher than the air freight costs. So, it’s actually cheaper, costs less overall, to fly than ship them by sea. And CO2 emissions be damned where the bottom line is concerned.
Similarly, the teardown companies regularly castigate Apple for building shiny shiny that it almost impossible to upgrade, repair or even recycle. One example is the practice of gluing batteries into place meaning that once you’ve gone through the battery’s lifespan of recharges you’ve got to junk the entire device. Very sustainable that is: but also highly profitable for the company, which gets to sell you a new one.
A closer examination thus seems to show us that Apple does indulge peoples’ green fantasies when it doesn’t cost them much if any money and entirely ignores such greenwashing when it might indeed affect that profit line.
And that, really, is Cook’s dilemma. He knows this, he’s a sharp enough cookie, but he cannot actually stand up and say so. The golden glow that the company gets when Greenpeace lauds its commitment to renewables is worth money in the bank. For there’s a large enough portion of us mug punters who will decide how to spend our money based upon such considerations. But Cook cannot actually say that Apple only does the easy stuff that doesn’t cost anything for this will shatter that carefully created illusion that they’re not a rapaciously capitalist company focused purely on that bottom line.
Therefore, when Cook is asked by some activist why he’s wasting money on greenery and not running the company purely for profit Cook cannot tell him the truth. That the company is being run for profit as it only does that amount of greenery that improves the profit margin and it most certainly doesn’t do anything that actually costs. For that would be to defeat the objective of doing the little that is being done.
“many of Apples loyal investors know it and don’t like it.”
This proposal was voted down by over 97% of APPL’s shareholders.
LOL - 97% of shareholders voted against the proposal. Al Gore is on the board and they don’t care. Good grief all they care about is a higher stock price. There won’t be shareholder uprising over “liberal colors.” That’s just fantasy on your part.
Those green apples...
Apple’s Chinese Suppliers in Trouble for Environmental Pollution
http://www.nytimes.com/interactive/2010/04/04/opinion/04opchart.html?_r=0
Therefore, when Cook is asked by some activist why he’s wasting money on greenery and not running the company purely for profit Cook cannot tell him the truth. That the company is being run for profit as it only does that amount of greenery that improves the profit margin and it most certainly doesn’t do anything that actually costs. For that would be to defeat the objective of doing the little that is being done.
You make a good point, and it doesn’t end there. Green cars and all the other electronic toys, gadgets, gizmos, musical instruments...they all go somewhere when they’re through using and playing with them.
They’ll put it in a green or blue trash bin and they think they’ve done some grand deed. Even better, they’ll try to sell them, thus passing the disposal problem to someone else. And then it’s out of sight, out of mind. “Not my problem.”
As others have pointed out, Apple has a recycling program, unlike most other manufacturers. There is an interesting article in the March 2014 issue of Popular Science, "The Garbage Man" about a man and his company trying to recycle tech garbage. "Among industrialized nations, the U.S. remains the only country without federal laws that mandate the domestic recycling of electronics and cars. As a result, much of that plastic flows offshore to the developing world."
At least Apple is trying to recycle. Why focus on Apple, when practically all other electronic waste is shipped off to Asia and Africa? Do you wonder about the final dump destination when you buy a PC, toaster, TV, or game station? That electronic waste ends up in China, India, Pakistan, Vietnam, Nigeria and Ghana but nary a peep from Americans complaining about the situation. Misplaced anger at Apple.
Two months ago, a neighbor down the street put some gadgets out for recyclers to pick up. While walking by, he asked me if I wanted any because he knew I dabble in computers. I grabbed an Apple laptop, wireless trackpads, 700w inverter, DVD recorder devices and other gear. Took me less than an hour to get them all working. Lots of things get trashed that are still useful, a real shame. I'd rather they get sold than trashed, as others (like me) combine components to repair machines. In the last few weeks I've bought used components for a few bucks (dc-in board and a laptop keyboard) to repair friend's laptops. This is not a passing of a disposal problem to someone else; it is avoiding a disposal situation by returning devices to useful service.
Icahn blusters a lot, but his shares are something less than 1% of the total outstanding shares of common shares regardless of the dollar value.
Apple is only concerned about the sustainability of Chinese workers as they keep leaping off the roof the plant where the Apple products are made!
Uh, no. The gold, silver, and aluminum content of the computers makes them far more recyclable than all the plastic computers from other makers. There are companies that literally "mine" old computers for the rare earth elements. Leaking battery issues doing damage was mostly from the old mercury cells. Lithium is no where near the problem mercury was claimed to be.
Uh, no. The gold, silver, and aluminum content of the computers makes them far more recyclable than all the plastic computers from other makers. There are companies that literally "mine" old computers for the rare earth elements. Leaking battery issues doing damage was mostly from the old mercury cells. Lithium is no where near the problem mercury was claimed to be.
Great idea for an app!!
Make one showing Chinese workers leaping off the roof of the Chinese factory where Apple products are made!
Score points for height & distance……
Mega hit!
or
Splat!
Had to re-up on my phone contract this week and was looking for a good excuse to s-—can my iphone.
Tim Cook offered one up as if on cue.
Yeah, because we all know NO Windoze machines are made in China.
Major eye roll...
BTW I just finished an investor meeting with 14 UK investors from various banks/hedge funds and /PE firms in England and Scotland. All 14 carried Apple devices (13 iPads and 1 Mac Book Air).
Ha! Icahn is a hold up artist. He could give a shit about actual management decisions. Guys like Einhorn, Tepper, Loeb and Gundlach are more management involvement activists.
I’m waiting for when they change it to Climate Waffling.
Check your "facts" Minnesota_bound. The suicide rate at the Foxconn plant is only 25% of the nation average for the Chinese demographic for that age cohort, AND. . . the suicides were not at an Apple manufacturing plant!
Reuse is the most efficient form of recycling, and Apple hardware tends to have a longer useful life, as reflected in its resale value. The first-generation iPhone is seven years old now, and they're still pretty hard to find for under $100. I have one that I use as an iPod, and while the OS is now four years out of date, no new apps are supported on it, and the battery doesn't hold the charge it used to, it makes a fine media player. Add the L5 remote dongle and it's a completely customizable universal remote.
It'll be a while yet before I take it to an Apple store for recycling.
I would agree on both counts. However… what is shocking, is that computer hardware quickly depreciates in resale value, regardless of who is manufacturing it. You are essentially "leasing" it for its technical value while relevant. The physical product may be the same in five years but obsolete in comparison to newer products. Apple products do tend to remain relevant longer (than other products) but resale value will eventually fall (long after others are worthless). Buy tech as if you are leasing, it won't hurt as much to think this way. I bought my last couple computers 1 to 2 years used and got great savings, letting the original owners pay for being cutting edge and in warranty.
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