The New York Times doesn’t like Apple’s tax practices, more companies in China are increasing factory worker pay scales, and the U.K. is investigating the iPad plus 4G name. Again. As if that isn’t enough to keep to keep Mac OS Ken’s Ken Ray busy, there’s talk of Apple hunting for TV show deals, more Apple television talk, Apple and Samsung’s patent lawsuits, and RIM’s publicity stunts, too.
Apple’s Big Tax Dance
Is it fair to wonder aloud at this point what the New York Times has against Apple?
Earlier this year the paper of record ran a three-part expose on working conditions inside contract electronics-maker Foxconn, though the emphasis was less on the treatment of Foxconn employees and more on the treatment of individuals who make Apple devices. Now Apple is being held up again as an example for a wider industry issue once more with the paper writing a lengthy piece on the lengths to which Apple and other tech companies go to to lower their corporate tax rates both here in the states and around the world.
Yes, Apple has “divisions across Europe, the British Virgin Islands, and elsewhere outside of the US to minimize how much it’s taxed,” Electronista said, but “within the US itself, (Apple) has taken advantage of Nevada’s absence of corporate tax to boost some of the gains that come into the US.”
Google, Dell, Yahoo, and other companies also use the loopholes, but anonymous execs in the Times piece says Apple does that to greater effect than most other companies.
So nothing Apple does is illegal, and yet it still seems to have gone on the defensive.
CNET sums up Apple’s response to the Times’ report, which also runs throughout the Times report. “In the first half of fiscal year 2012,” says Apple,
Our U.S. operations have generated almost $5 billion in federal and state income taxes, including income taxes withheld on employee stock gains, making us among the top payers of U.S. income tax.
They also sold themselves on job creation, saying, “The vast majority of our global work force remains in the U.S., with more than 47,000 full-time employees in all 50 states. By focusing on innovation, we’ve created entirely new products and industries, and more than 500,000 jobs for U.S. workers — from the people who create components for our products to the people who deliver them to our customers.”
And they give to charity, though quietly, with the company saying, “Our focus has been on doing the right thing, not getting credit for it.”
Apple says, “Apple has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules. We are incredibly proud of all of Apple’s contributions.”
In the end, it’s an issue almost as thorny as the Foxconn issue. Everybody seems right, and everybody seems wrong. It’s curious,though, the New York Times going after them again.
4G in the UK. Or Not.
Apple may be back in trouble with Britain’s Advertising Standards Agency. The Telegraph out of the UK says the ASA is looking into complaints that Apple is still promoting the new iPad as a 4G device on its UK site, despite a lack of 4G compatibility there.
It’s kind of funny, actually. The piece indicates that there’s no 4G network in Britain right now, but there will be one day. And when it’s built, the iPad + 4G won’t work on it. Different frequencies, you see. Still people seem a bit confused, and the ASA seems a bit stymied, having already settled this issue with Apple.
According to a spokesman for the agency, “When we approached Apple with the concerns that had been raised, it stated it had removed references to 4G from the webpage that was subject to the complaints.”
The spokesman also said, “We have since been contacted by several complainants who have identified other potentially problematic claims about the iPad and 4G on Apple’s website. We are currently assessing these new complaints. If it appears that the problem claims we asked Apple to remove are still appearing, (we) will investigate these new complaints.”
The Telegraph says the original investigation was started after 40 people complained to the ASA. That’s 40 people out of over 62 million people in the United Kingdom.
The question is not “when did we go off the rails,” but “how often do we do so?”
See, I’m confused. These 40 people are aware that 4G is faster than 3G, but aren’t aware that there’s not a 4G network in the realm?
And, just for fun, may I mention one more time that we’re discussing an investigation launched by the complaints of 40 people… out of over 62-million people served?
Tell you what: Let’s get this taken care of first, then we’ll work on poverty, pollution, and world hunger.
Bumping Up the China Payroll
Apple’s moves to increase worker pay and reduce worker overtime in the far-east supply chain seem to be spreading. Thanks to pressure from Apple and workers rights groups, Foxconn in March raised pay for its people who build Apple hardware, and reduced the amount of overtime they were allowed to work.
Now AppleInsider has Topeka Capital Markets analyst Brian White saying TTM Technologies, which makes printed circuit boards for Apple, has followed suit. White says TTM is raising wages in China to improve employee retention, though the raises will likely simply offset the salary reduction workers would otherwise see, thanks to the reduced overtime opportunities.
That was a problem workers had at Foxconn — or a concern, really. They wanted more overtime than they would soon be allowed to serve because they wanted the overtime money, fearing that Foxconn wouldn’t follow through on the higher wages pledge.
And that puts TTM between a rock and a hard place. On the one had there’s the chance of a disgruntled workforce. At the same time, the moves hurt the company’s bottom line. White says TTM’s gross margin is likely to be negatively impacted as a result of the changes.
No good deed goes unpunished.
Apple: TV Content Hunter
Apple is said to be sniffing around for video content. Maybe for Apple TV, maybe for an Apple television, or both.
Citing sources of the unnamed variety, a Reuters piece has the Cupertino-company in early-stage negotiations with EPIX, a joint venture created a couple of years ago by Lions Gate, MGM and Paramount Pictures.
One source says any deal would apply to the set-top box of today as well as “upcoming devices that stream content.” That is, of course, not so secret code for the full-on Apple television expected by many either late this year or sometime in 2013.
One possible hindrance is the current deal between EPIX and Netflix. Netflix has exclusive rights to stream EPIX content through September, but — of course — nobody’s expecting the television before then anyway, and this may not even be for the television. And it may not even happen.
No comment from Netflix, EPIX nor Apple for the Reuters piece.
Apple TV… Not Coming Soon
Holding your breath for an Apple Television? Can you hold it for another year and a half to two years? Cuz JP Morgan analyst Mark Moskowitz thinks you may have to.
CNET has Mr. Moskowitz saying Apple’s not launching any kind of television this year, though he is just guessing, just like all the people who say Apple is launching a television this year. Sure, they may launch one eventually, but if they do it’ll be step two of a TV two-step.
I’m just dying to do the TV two-step by the way. In case you’re wondering.
Step one, in Moskowitz’s opinion, will start with an expansion of the Apple TV set-top box. Something more advanced, though in what way, he doesn’t say. He’s not expecting that until 2013, then maybe a full-on television in 2014 or later.
The reason: It’s a crowded market with low returns.
Quoting his note to clients on the issue,
We believe that the economics of the TV industry are strained, despite there being suitable offerings from the likes of Sony, Sharp, and Samsung … Overall, we would be surprised to see Apple enter a new market unless the value proposition could support double-digit operating margins. In TVs, that bogey is rather elusive, in our view.
While people have at times shown a willingness to pay a premium for Apple hardware, for people to do that with a television, not only would the user interface have to be redesigned, but content would have to be better integrated, and voice and motion controls would have to be in the mix. And Moskowitz doesn’t see all of that landing that soon.
“Until such time,” he writes, “we are skeptical that end customers would be willing to pay the Apple premium for a TV.”
Moskowitz does, however, end the note with a reverse footer, saying, “Despite our current skepticism, we think that if any company can radically alter the TV landscape, it is Apple.”
So, I don’t believe in Santa Claus… but just in case he is real, I’m gonna ask him for a pony.
Moskowitz thinks the next big thing for Apple could be mobile payments, which would call for the inclusion of Near Field Communication technology in the next iPhone, which it seems like people have been calling for since the time of the iPhone 3GS.
Well, as long as we’re playing, why not?
The Patent Dance
Apple and Samsung are telling the courts — and each other — what they’d like to see left out of their case in the U.S. Fortune has FOSS Patents’ Florian Mueller going through the motions.
Samsung doesn’t want to hear anything from the likes of Fortune… or Apple Insider… or… any other armchair quarterbacks. “Apple related blogs, and articles by non-expert newspaper reporters, regarding any assessment of Apple and Samsung and/or their products,” should be verboten as far as Sammy’s concerned. Or whatever the Korean word is for “verboten.”
Fortune says the Galaxian “also wants to exclude testimony from Apple’s expert on consumer decision making, Sanjay Sood, who — using a familiar Apple trope — described the company as having design in its DNA.”
Apple’s exclusions are a bit more interesting. For starters, they’d like the Walter Isaacson biography of Steve Jobs on the no-no list. Meaning such passages as Jobs saying Google ripped off the iPhone and that he’d spend every penny Apple had to destroy Android… yeah those would be out of the court record, despite being very much in the public record.
But the most interesting thing Apple wants to see unseen at the trial: the Samsung logo.
FOSS Patents’ Florian Mueller says, “Apple intends to bring a motion for ‘[o]bscuring the ‘Samsung’ logo on the court’s video display for jurors.’ Apparently the United States District Court for the Northern District of California uses Samsung equipment for this purpose.”
Makes sense. Do you really want a jury deciding the fate of the case staring at one of the defendants’ logos all day?
Hey I’ve got an idea. Maybe Apple could bring a television of its own. You know, if it’s got one in a lab or something.
RIM’s Wakeup… Thing
And finally this week, the “wake up” mystery meets a rather anticlimactic conclusion. CNET Australia says BlackBerry maker Research In Motion has claimed credit for the fake protest, which had a black bus pulling up outside an Australian Apple Store and disgorging a load of black clad people who began chanting “wake up” at the people in the Apple Store.
The piece has RIM issuing a statement saying, “We can confirm that the Australian “Wake Up” campaign, which involves a series of experiential activities taking place across Sydney and Melbourne, was created by RIM Australia. A reveal will take place on 7 May that will aim to provoke conversation on what ‘being in business’ means to Australians.”
I’m no marketing whiz, but I’m gonna say this was not money well spent. When the “wake up” events started last week, most people thought they were Samsung’s doing. Research In Motion was not the first company to leap to mind, and nothing in the events indicated that maybe people should be thinking Research In Motion.
Samsung Australia even went as far as denying involvement in the “wake up” happenings, and still some people figured they were Samsung deals. Samsung, after all, has many, many divisions, so just because Samsung Australia said it wasn’t them didn’t mean it wasn’t some branch of the South Korean electronics maker and Apple nemesis du jour.
But way to go, Research In Motion. I can’t wait to forget that you’re supposed to reveal something on May… something.