APPLE the TNC case study GEO AND ECON

APPLE the TNC case study

When was Apple founded?

• 1ST of April 1976

What did it acheieve in 2018 in valuation and what is current?

• It became the first country to acheieve a valuation of $1 trillion dollars

• Today Apple is valued around $4 trillion dollars

How many people does Apple hire?

164,000 full time employees

How many stores does Apple have, in how many countries, how many in the USA and how many in California?

• 540 stores in 27 countries

• 272 in the USA and 54 in California alone

How does Apple produce products?

• It does not own any mass production factories

• It completely outsources all of its products to firms such as the Taiwanese firm Foxconn

Where is the biggest Iphone factory in the world, how large is it, how many work there, who owns it and how many Iphones does it produce a day?

The biggest factory is Foxconn plant in Zhengzhou which spreads across 2.2 miles and hires 350,000 workers able to produce 500,000 Iphones per day

Where is Apple HQ?

Sillicon valley in California US

How many countries does the Apple Supply chain span and how many people does it support?

The supply chain spans 50 countries and supports over 3 million people

How many parts are in an Iphone and what is their origin?

• Iphones have 500 parts

• 90% of parts are made outside the USA

Where are raw materials from overall, where does copper come from and where does cobalt come from?

• Poorer and less developed nations

• Such as copper in Chile and Colbalt from the DRC

Where are semi-conducters and advanced display technology from?

• Semiconductors are from Taiwan

• Display tech is from South Korea

How is Apple altering the production of Iphones, what percent produced in India 2024 vs 2027 projection and what product is produced elsewhere?

• They are diversifying their supply chain although most Iphones still assembled at Foxconn plant in Zhengzhou

• This is because in 2024 15% of Iphones were produced in India

• This is projected to reach 25% by 2027

• Vietnam also produces Airpods

What is the largest retail market for Iphones?

The USA than Europe

How much of Iphone value does Apple capture and what is this an example of?

• 58.5% of Iphone value

• A classic example of TNC’s exploiting global differences to boost profit as design and marketing make much more profit than assembly

What are the advantages of Apple for China and Ireland?

CHI/ Knowledge and jobs

IRL/ How many jobs in Cork, what has been created and what was paid to the Irish government?

• In China Apple has provided mass employment which offer higher wages than local farming jobs, with the firm estimated to support around 5 million jobs.

• Also knowledge transfers to China have occurred as Chinese industrialists learn from the best in the world and Shenzhen has become a tech hub in China boosting the economy through R&D hubs in the city.

• In Cork in Ireland Apple employs 6000 with strong pay and has furthered this by creating a tech hub with Google and Meta both moving in to the area

• Apple has also hired many young Irish graduates and Apple payed the Irish government 13 billion euros of tax in a recent EU ruling due to avoiding tax unfairly

What is Apple’s Racial equality and Justice innovation and when was it launched?

How much had they committed to education in this initiative and by when?

How much have they committed to mission aligned businesses?

Who have Apple also recently partnered with?

• In June 2020 $100 million commitment to challenge systematic barriers to oppoturnity for people of colour was undertaken by Apple

• By 2023 this reached $200 million through education grants to historically black colleges and univeristes and Hispanic serving institutions

• Apple has also commited $50 million in venture capital support and more than $100 million in overall finanicing to mission alligned businesses

• In the UK Apple partnered with SouthBank centre to launch reframe a programme designed to reduce barriers for black creatives

What are the disadvantages of Apple in China?

What are wages, what are working conditions, what happened in 2010 and what is accused?

• At the Foxconn factory in Shenzen workers experince poor working conditions with China Labour Watch reporting 10-12 hour work days 6-7 days a week for as little as $2-$3 dollars an hour

• In 2010 14 workers at the Foxconn factory in Shenzen killed themselves and safety nets were installed to stop people dying not reforms

• Foxconn are also accused of exploiting student interns as workers and having them face course failure for not working doing the same work with less protections

What are the disadvantages of Apple in Ireland and DRC?

DRC/ Worker health and pay?

IRL/ What was being payed and what got forced?

• In the DRC colbalt mines are used to supply the materials for Iphones with children as young as seven working carrying heavy loads and being exposed to toxic dust for less than $2 a day

• In Ireland Apple also used a tax loophole to pay tax rates as low as 0.005% and were forced to pay Ireland $13 billon from the EU

What is Apple’s net income and ECON ONLY WHAT DOES THIS LEAD TO?

Over $112 billion

This leads to efficiency gains due to long term investment of supernormal profit to create innovative products as Apple creates new Iphones every year, better cameras, better IOS updates and better battery.

How much did Apple return to shareholders through dividends in 2025?

Around $15.4 billion raising quarterly payment to $0.26 per share in May 2025

Econ/ What does Apple do with economies of scale?

• Apple exploits massive economies of scale across the world with design and R&D in silicon valley in California

• With 15% of production of Iphones in India in 2024 and the Foxconn plant in Zhengzhou China produces 350,000 Iphones a day

• This risk bearing economies of scale distributes risk over much more units of outputs and diversification reduces the impact of bad outcomes like a conflict or trade war in one area

• Also Apple purchases millions of outputs annually decreasing the units costs from suppliers

Econ/ What does Apple’s prices show about the economies of scale however?

Iphones cost around £1000 so even though they are benefiting from low costs they are not operating at allocative efficiency and they are charging a price which is much higher