Implementation of an Eco-Friendly iPhone Product at Apple Inc
In 2008 and 2009, consecutively, the Fortune Magazine named Apple the most admired company in the U.S. and the world (Colvin, 2009, Fisher, 2008). Apple Inc is a highly successful electronics and computer company, which has a history of implementing cutting-edge, innovative products like the iPod, iPhone and iPad. However, its environmental performance has not always been up to par, as Apple has historically lagged behind other competitors in the implementation of eco-friendly products. This presentation suggests that Apple could take the lead in the environmental field by producing a new green iPhone that would employ the company’s expertise in design, development and marketing to create a ‘cool’ and qualitative product.
- Brief History of Apple Inc
Apple Inc. was founded in 1976 by Steve Jobs, Steven Wozniak and Ronald Wayne with the express purpose of investing into the new market of personal computers. The creation of Apple II propelled the company to success and fame; within two years of the marketing of the Apple II, the company made it to the Fortune 500 list (Chan Kim & Mauborgne, 2005). In 1984, the company followed its success by introducing the Apple Macintosh computer, which initially fared very well (Hormby, 2006). However, stiff competition from the PC market caused Apple’s sales to drop throughout the 1990s.
Since 2000, Apple has returned to growth. Paradoxically, its success was due not to its traditional computer business, but to other electronic products. In 2001, Apple proposed the iPod portable digital audio player, which met with extraordinary success, selling more than 100 million units in the first six months (Cantrell, 2006). The iPod was followed by the revolutionary introduction of Apple’s smartphone, iPhone, in 2007 (Clark, 2007). Apple has now become the fourth mobile phone maker after Nokia, Samsung and Blackberry (Wikipedia, 2010).
- Apple’s Environmental Performance
Apple’s environmental history has been chequered. The company has been targeted numerous times by environmental organisations, particularly Greenpeace, for its lack of commitment to the subject. In 2007, when Greenpeace protested against Apple, Steve Jobs notoriously replied that they should “get out of the computer business [and] go save some whales” (Gardiner, 2008). This type of talk was not going to endear Greenpeace to Apple’s side, and the NGO has made it clear that it continued to be concerned with the company’s policies. At the end of 2007 it targeted the iPhone, which, according to Greenpeace, contained hazardous chemicals such as brominated compounds (BFRs) and toxic phthalate esters. The nonprofit Center for Environmental Health in California used Greenpeace’s report to sue Apple for failing to inform consumers of the phone’s chemicals (Gardiner, 2008). Another NGO, Climate Counts, rated Apple as one of the worst performing electronics companies in the field of environment in 2008 (Gonsalves, 2008).
In the face of such criticism, Apple has begun to improve its environmental image. It has phased out the use of BFRs and PVCs in its internal components and has been working to remove all bromine and chlorine from its products. The new 2009 iPhone 3GS was built free of PVC, arsenic, BFRs and had an efficient power adapter (Apple, 2010). In October 2009, Apple also replaced the cathode-backlit LCD displays with mercury-free LED backlit LCD displays and arsenic-free glass on its iMac and MacBooks (Apple, 2010). In September 2009, the company also introduced a complete lifecycle analysis of its greenhouse gas emissions, claiming that “We’re the only company in our industry that considers the environmental footprint of every product we make. And we’re the only company to add up all our greenhouse gas emissions and tell you how they are distributed across — and beyond — a product’s lifespan” (Apple, 2010). Apple’s 2009 efforts have not gone on unnoticed, the company being praised by the NGO ChemSec and Clean Production Action particularly for its work on phasing out bromine and chlorine products (Darymple, 2009).
Despite these advancements, Apple has not yet set itself at the forefront of environmental initiatives. As a conjectural example of the importance of environment to Apple, the Environment News page has not been updated on its site since October 2009. Recently, the new iPad product has been criticised for using a dangerous chemical, n-hexane, in its composition, which allegedly has caused poisonings amongst workers at Apple’s Wintek supplier factory (Cangeloso, 2010).
- The Eco-Friendly iPhone
Despite Apple’s phasing out of PVCs and BFRs in its iPhones, the company has not yet completely embraced the eco-friendly phone idea. Other mobile phone producers like Samsung, Sony Ericsson and Nokia have unveiled ‘green phones’ made of environmentally friendly components. For instance, in 2009 Samsung proposed a mobile phone, the W510, made with corn-based plastic, while Sony Ericsson’s GreenHeart, features bio-plastic and recycled plastic (DiRamio, 2009). The recently unveiled Samsung BlueEarth took the concept of green phone to a new level, by offering a solar-panel recharge feature. BlueEarth is made up of post-consumer recycled content—PCM, boasts a super efficient charger and is made without BPRs and PVCs (New Ecologist, 2010).
The economic demand for green phones is still small, at least in North America. According to a 2009 ABI Research study, if price, features and performance were the same as a regular phone, only 40% of the 1,000 mobile phone users surveyed stated they would purchase a “green” phone. The demand would fall sharply if the price was higher; thus, only 7% declared themselves willing to pay a premium for a green phone. However, the results must be weighed against the general lack of awareness about green phones: only 4% stated they were very familiar with green handsets (Osborne, 2009). Demand may increase as more marketing and public relations campaigns create a broader awareness of the topic. Samsung and Sony Ericsson’s initiatives have already generated a limited buzz for the green phone idea.
In any case, the demand for environmentally friendly products is likely to grow as consumers and businesses become more eco-aware. There has been an upward trend in the demand for environmentally friendly products (Ginsberg & Bloom, 2004). Customer behaviour is increasingly environmentally conscious: for instance, while only 8% of North American mobile phones have been recycled in 2009, the amount is expected to grow to 17% by 2014 (Osborne, 2009). On the business side, the support for environmentally friendly practices and products enhances a company’s reputation on the market. Studies have shown that environmental sustainability practice is intrinsically linked with reputation, which in turn has a great impact on the sales and stock prices of businesses (Blackburn, 2008). In this sense, Apple’s chequered environmental reputation would be highly enhanced by the introduction of a green phone.
Environmentally friendly products can also be economically viable, although long-run benefits are more likely than short-run ones due to the costs implied in re-designing product lines and supply chains (Handfield & Nichols, 1999). A useful method of re-aligning corporate practices is eco-efficiency, defined as increasing productive output while using fewer resources (Welford, 1998). Eco-efficiency yields measurable benefits, often presented as the reducing carbon footprint of a business (Wackernagel, 2008). However, the proper eco-efficiency methods must be carefully considered because the wholesale adoption of ‘popular’ approaches that are not adapted to a company’s culture may have a negative effect (Figge & Hahn, 2001).
The introduction of a green iPhone would initially require Apple’s investment into eco-friendly design. Studies have shown that Apple is much more focused on design rather than technical implementation creating an artsy quality to its products (Thomke & Feinberg, 2009). The level of detail and commitment to simplicity that Apple is famous for would enable the creation of a product that would most likely be superior to its competition in this field. The cost would be reduced by taking advantage of the ‘neutral’ features that are already present in iPhone design.
The actual production of the green iPhone would depend on the proper selection and employment of eco-friendly component suppliers. However, the actual process of production should be supervised by Apple in order to ascertain the application of environmentally friendly and eco-efficient procedures. Apple would need to design a supply chain based on sustainability principles (Seuring et al, 2008). The development of eco-efficient standards within the company would be desirable in this respect.
Apple has a history of successful marketing. Every product launch has been a densely orchestrated media campaign that exploits extravaganza and ‘coolness’ (Morrison, 2009, Elkind, 2008). Although marketing commonsense would advise Apple to focus on the environmentally conscious market segment (Pickett et al, 1995), the company has the unique capacity of promoting an eco-friendly phone to a mainstream audience by emphasising that it is ‘cool’ to be environmentally conscious. The general market segment would thus most likely be young people, who already consider Apple to be a cool innovator and tend to be open to environmental ideas. The pricing policy should be consistent with Apple products, which tend to demand a premium for quality, but should be comparable with other iPhone products. Placing a higher cost on the eco-friendly iPhone may be unsustainable, as research generally shows that consumers are not ready to pay more for environmental products (Ginsberg & Bloom, 2004). Rather, the product should take advantage of the already successful iPhone product, by marketing it as an ‘iPhone with a green edge’. Distribution should follow the usual Apple channels, selling through their Apple stores and network operators like Vodafone, O2 or Orange.
Apple Inc. has the opportunity to affirm itself at the cutting edge of green technology by producing and selling a eco-friendly smart phone. By building on the already existing iPhone brand, it could invest and develop a green iPhone that would employ eco-efficient techniques in design and production. Although the development of such an iPhone may not be highly profitable in the short run, it could enhance Apple’s environmental reputation, tap into a growing environmental market and even produce long-run cost-cutting solutions.
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