Branding experts have expressed mixed opinions about whether the poor working conditions uncovered in technology giant Apple's Chinese factories will impact brand perception.
In recent days, the global company has come under intense scrutiny, following a New York Times investigation which revealed several workers have died in a Chinese factory belonging to Apple supplier Foxconn, due to unsafe working conditions.
While the unsafe work conditions in Chinese factories and the relationship Apple has with these factories has been an issue for some time, the recent story brought the long-simmering issue to the forefront, and has put the widely-loved Apple brand in the spotlight.
Apple chief executive Tim Cook has since said in an email: “We care about every worker in our worldwide supply chain…any suggestion that we don't care is patently false and offensive to us.” The brand has begun inspecting more factories in its supply chain, as well as opening up the chain to independent evaluations.
Local branding experts have mixed opinions on whether the latest revelations will impact the brand in Australia. Julian Martin, chief executive of branding and advertising agency JMK, said the negative impact on the brand will be long lasting.
“When the controversy with Nike and the Asian child labour happened, it became a major underside of the brand. It has become a long term negative legacy. For a brand like Apple, which positions itself as being about change for the better, if it is involved in potential abuse, this will have a major impact, and not just in the short term.
“This is a complex PR issue, involved in multi-country politics. We may be pretty far removed here in Australia, but we all read about it, so there is an immediate impact, and it could impact sales and brand equity.”
Interbrand's ANZ chief executive Damian Borchok said Apple's recovery depends on the speed of its response and the level of transparency it adopts.
“There is an expectation that a company respond quickly, and are seen to be taking appropriate action,” Borchok said. “The company must be seen to do something before the damage really sets in.
“Apple must deal with its supplier appropriately, so if the supplier is operating in unacceptable conditions, Apple needs to cut ties with the supplier or take action to make sure this doesn't happen again.
“If this becomes a trend, there will be some long term impacts, but if Apple responds quickly then the situation should resolve itself.”
Marshall Ward, managing director of branding consultancy Blue Marlin, has a different point of view. He argued that the situation with Foxconn in China will have very little impact on the Apple brand.
“I think this isn't really news to anyone who follows the fortunes of the Apple brand,” Ward said. “It's no surprise that Chinese working conditions are not humane, most people know about this already. It hasn't impacted the fortunes of Apple, they have recently released their highest revenue figures ever.
“People would probably say this is unfortunate, but the world's infatuation with Apple's products is more powerful. What's more, [Apple CEO] Tim Cook has come out on the front foot and said the company does care and has shown a great level of transparency.”
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