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Twitter is reportedly failing to pay some suppliers amidst cost-cutting measures
Elon Musk is reportedly refusing to pay hundreds of thousands of dollars in travel bills accumulated by Twitter employees before he took over the company.
Cyberattack forces Toyota to suspend vehicle production in Japan
Toyota has reportedly halted vehicle production at all its plants in Japan following a cyberattack against a major supplier.
Facebook pledges $200 million to support Black-owned businesses
Facebook plans to spend $200 million to support Black-owned businesses and organizations.
Tesla reportedly asks for money back on payments to suppliers
Tesla's financial woes have been in the headlines for awhile now, and their latest move isn't exactly one that instills confidence. According to The Wall Street Journal, Tesla has been sending memos to its suppliers asking for retroactive discounts. In other words, it's asking for cash back on payments it has made to these suppliers since 2016. While hard numbers aren't available, Tesla described it as a "meaningful amount of money" in the memo.
Apple says most iPhone metal suppliers conflict-free, pushes the rest to get in line
It's easy to forget that the wondrous, tiny computer in your pocket is built from components sourced all over the world, and sometimes, those building blocks come from not-so-nice origins. War-torn regions of the world often use resource and mineral sales to fund local conflict, creating a moral dilemma for gadget consumers and hardware manufactures alike. Naturally this issue has gotten some attention, and Apple says it's doing its part to ensure that its products are built from conflict-free materials. In the company's 2014 Supplier Responsibility report, Cupertino confirmed that as of January 2014, all of the smelters that provided tantalum metal to its supply chain were verified as conflict-free by third-party auditors. The company couldn't quite say the same for the other metals used in consumer electronics, however: several of its gold, tin and tungsten suppliers won't openly verify compliance with the Conflict-Free Smelter Program (CFSP). Apple hasn't cut ties with these manufactures, but it has pledged to publish a quarterly report of the names, countries and CFSP status of all its suppliers to help "drive accountability" and promote participation. With any luck, Cupertino will be able to shame the rest of its supply chain into boycotting conflict-minerals -- delivering on its 2011 promise to build guilt-free iPhones.
WSJ: Apple to use Samsung retina displays on next iPad mini
Earlier this month, there was a rumor that Apple was facing possible delays with its next-gen iPad mini due to supplier issues with an (also rumored) next generation Retina display. Now WSJ is reporting that Apple may have gotten around the problem thanks to, of all companies, Samsung. The ubiquitous "people familiar with the matter" told the journal that Cupertino originally wanted to be supplied solely by LG Display and Sharp for the high res screens (likely to be the same 7.9 inches as the current model). However, to ensure enough supply, Apple has reportedly been forced to resort to Samsung's display division for the next iPad mini, too. It bears noting that such supplier leaks are often unreliable, and as we've mentioned before, Apple frequently tests components before deciding on a final design. If true, though, it would show that despite its best efforts, Apple can't make a clean break from its frequent sparring partner.
WSJ: Apple testing larger iPhone, iPad screens with suppliers
Rumors that Apple is looking to super-size its upcoming iPhone and iPad lineups are gathering steam, thanks to a recent report from the Wall Street Journal. It cited Apple's suppliers in Asia, who said that Cupertino is testing a 12.9-inch iPad design and prototype iPhone screens larger than the current four inches. While Apple wouldn't comment, of course, that jibes with an earlier Reuters report, which claimed it was considering 4.7- and 5.7-inch iPhone screens. If accurate (and that's always a big if with such rumors), the report doesn't necessarily mean that products with larger displays will ever come to market -- Apple routinely changes specs and tests components during the development cycle. Still, it would be further evidence that the company's willing to bend on its one-size-fits-all screen size policy, which is something that the large-handed (or weak-eyed) among us might appreciate.
Daily Update for March 12, 2013
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for daily listening through iTunes, click here. No Flash? Click here to listen. Subscribe via RSS
Apple suppliers had a very tough February
February is usually not a great month for the companies that supply Apple with its iOS and Mac device parts (Chinese New Year usually falls right in that month, and production in China always take a big downturn as people celebrate there). But this particular past February was especially bad, according to reports: Topeka Capital Markets analyst Brian White says that the suppliers for Apple that he tracks saw their sales data fall 31 percent over the past month, as compared to the usual 8 percent drop in past years. That makes for the worst February on record for Apple's suppliers, which may or may not soon have an impact on Apple. Now, with Apple's suppliers showing low sales data, that could mean more opportunity for Apple to step in with its big pile of cash and make sure that it has more components than ever to build new devices with, so it's not entirely clear that this will be a bad thing for the company from Cupertino. But of course Apple depends on these suppliers, and if they suffer increased economic pressure for any reason, Apple could experience consequences for its own business.
An iPad mini with Retina display could cost $12 more to build
Hardware market research firm iSuppli has released a new report that claims the cost-per-device of an iPad mini sporting a Retina display screen could be fairly high: as much as $12 or more. Even if all of the other parts stay the same price, just adding a Retina display in the iPad mini's size, iSuppli's report suggests, would bring Apple's cost above $200, which would likely mean higher costs for consumers as well. Which doesn't seem all that impossible -- the current iPad mini is selling quite well at $329, and you have to think that potential purchasers would be happy to spend a bit more for a full Retina display. Plus, if Apple really needed to shave some of that margin off just to boost sales, it probably could (though that would be a very un-Apple move, and it seems like it'll be a while before the iPad mini needs any extra help). For any other company, $12 per device might be a real problem, but Apple has still has quite a few options to deal with such a high increase in cost. Not to mention that Apple is always working on its supply costs, so while that may be the price now, the company may be working hard on figuring out a new way to supply and develop smaller Retina displays, or to work out a deal to make them cheaper in general. It's true, putting the Retina display in the iPad mini won't be cheap at the moment, but if anyone can figure out a way to do so without attacking their very high margin, it'll be Apple. [via App Advice]
Apple releases 2013 supplier responsibility report
Apple's annual supplier responsibility report has proved to be a key insight into the company's labor practices, especially as scrutiny over working conditions in its supply chain grows. The 2013 report, quietly released Thursday night, gives insight into how the company is dealing with issues such as underage workers and excessive work hours. Highlights in the report include a 72 percent increase in audits over 2011. Apple conducted 229 audits in 2011 and 393 in 2012. Of those, 55 audits focused on environment, 40 on specialized safety processes and 27 on bonded labor. Apple also says that 92 percent of its suppliers now comply with a 60-hour work week. It also discussed the company joining the Fair Labor Association and the subsequent independent audit Apple asked it to conduct. Suppliers were also made to reimburse US$6.4 million in excessive foreign contract worker fees. As noted by AllThingsD, Apple also discovered a case where 74 underage workers were employed by a supplier that produced circuit boards. Apple severed the relationship with the supplier and turned the hiring agency that had forged documents for the workers over to the government.
Sterne Agee analyst: iPhone 5 demand 'remains robust'
Yesterday's Wall Street Journal report that Apple had cut iPhone 5 parts orders due to weak demand for the phone may have been incorrect. Shaw Wu, an Apple analyst with Sterne Agee known for his insightful questions during Apple earnings calls, said in a note to investors today that suppliers still show demand that "remains robust." Wu and several other Wall Street analysts believe that the rumored component order cuts have nothing to do with customer demand. Their take is that yields on the components have improved as suppliers gain experience, and Apple needs to place fewer orders to end up with the parts required to build the iPhones. He also stated that Apple shifting production between suppliers may have contributed to the appearance of cuts. The other analysts include Mark Moskowitz of J.P. Morgan, who said that the reports of lessened demand are "just noise," and Wells Fargo's Maynard Um, who was quoted as saying that any cuts are "not news." Sterne Agee is still bullish on Apple, with a "buy" recommendation on the stock and a price target of US$840. For Wu's part, he's forecasting sales of 47.5 million iPhones for the December quarter, above the market consensus of 46 to 47 million.
Microsoft reportedly building up to 5 million Surface tablets for the fall
Just how confident is Microsoft that its Surface tablets will take off? To the tune of 3 to 5 million units shipped in the fall alone, according to the Wall Street Journal's supplier contacts. While that wouldn't be much when Apple already ships more than three times as many iPads, even discounting the supposed 10 million tiny iPads coming this fall, it would represent a strong start for a company that's only just dipping its toes into own-brand computing. Microsoft isn't confirming any numbers at this stage, but the large production volume might explain that Busby Berkeley-style TV ad -- you'd want a full song and dance routine if you had that many Surfaces to sell.
Samsung finishes initial Chinese factory audits, plans long-term solutions to labor woes
Samsung faced some serious allegations surrounding the plants of its Chinese contractor HEG Electronics earlier this month, including potentially dire accusations that HEG was employing child labor. The Korean firm promised audits to set the record straight, and we're seeing the first fruits of those inspections today. The results were decidedly mixed. While there weren't any underage workers when Samsung visited, it did find HEG staff working excessive overtime, some unsafe practices and a system that punished late workers with fines. Samsung's response will go beyond just asking HEG to shape up, though: it plans to finish auditing all 105 of its exclusive Chinese contractors by the end of September, determine whether inspections of non-exclusive contractors are needed and set up a long-term audit schedule past 2013 that includes tougher requirements. While there's no certainty that the reforms will lead to the intended results, we're glad to hear that Samsung wants to turn things around at such a rapid pace.
Apple gets paid for products faster than it has to pay for manufacturing
Here's yet another sign of what a great position Apple has put itself in in terms of manufacturing: According to the Wall Street Journal [paywall], the company gets paid by its customers much faster than it is required to pay its suppliers. The difference between the inflow of sales and the outflow of manufacturing capital means that Apple's capital investment is actually negative -- a sort of fiscal antigravity. Apple is getting paid by customers after 18 days on average, but it has leveraged into a position where it has up to 83 days to pay its suppliers. That's phenomenal, and it's a result of quite a few different initiatives by the company in the past. First, not only are Apple's products built around high profit and high demand, but Apple has made various company acquisitions and locked down powerful supply deals. This also means that the companies that Apple has teamed up with end up taking on more of the risk than usual, leaving Apple in a very agile and flexible position. According to the WSJ, in 2011 Apple paid to keep only four days of inventory on hand, versus 10 days of inventory held in 2010. Again, this is of course the product of years of spending on R&D, acquisitions and investments, and Apple's legendary advertising budgets and reputation for quality. But it's obviously a very impressive place for Apple Inc. to perch. [via 9to5Mac] #next_pages_container { width: 5px; hight: 5px; position: absolute; top: -100px; left: -100px; z-index: 2147483647 !important; }
Suppliers' stocks climb on Apple's success
As the old saying goes, "a rising tide lifts all boats," and that's never been more apt than in the case of Apple suppliers. As the company's fortunes have risen, so have those of the many suppliers who make the bits and pieces that go into every iPhone, iPad and other Apple products. CNNMoney notes that Apple's shares rose almost 10 percent this morning after yesterday's earnings call. This transferred over to some semiconductor manufacturers almost immediately -- Cirrus Logic was up about 9 percent, Skyworks Solutions was up more than 6 percent, and Triquint had a bump of about 5.5 percent. Even two larger semiconductor companies that supply Apple -- ARM (which gained 3.6 percent) and Qualcomm (up 2 percent) -- saw a solid jump in stock price today. Omnivision, a company that builds iPhone camera sensors, was up 6.2 percent on the solid Apple news. A company didn't need to be a supplier to reap the benefits of Apple's incredible news. Zagg, which makes iPhone and iPad accessories, also jumped up about 5 percent this morning.
Chinese customers investing in Apple's suppliers
It's a gold rush in China as investors line up to cash in on Apple's success by buying up shares in Apple's Asian suppliers, says a report in Reuters. Chinese law prevents investors from buying Apple directly, so many are turning to firms Apple mentioned on its recent supplier list. Even companies rumored to be an Apple supplier are benefitting from this enthusiasm for anything related to the Cupertino company. Analyst Zhou Feng of Donghai Securities Co. said, "Investors want to share in Apple's growth as they believe sales of iPhones and iPads will remain strong." We will see how strong these sales are later today when Apple announces its quarterly earnings for Q2 2012.
Apple supplier shows 95% overtime compliance in March 2012
Apple maintains a supplier responsibly report on its website and recently added some new statistics that show overtime working conditions are improving in its factories. Noticed by The Next Web, Apple is now seeing 95 percent compliance with its 60-hour work week requirement. This is up from 89 percent in February 2012 and 84 percent in January 2012. As noted before, most workers are averaging a 48-hour work week. This latest report covers over 800,000 workers in supply chain factories who are tracked weekly. [Via The Next Web]
Apple's China audits don't inspire the same from other companies
As TUAW has reported previously, Apple is working with the Fair Labor Association on a study of working conditions at supplier factories. The independent audits are attempting to determine areas where workers may be exposed to poor or dangerous working or living conditions so that changes can be made for the sake of the workers. Those audits have begun, but according to a Bloomberg article this morning, Apple's peers in the consumer electronics industry don't seem to be following suit. The Bloomberg post notes that "companies including Microsoft Corp., Dell Inc., Hewlett-Packard Co. and Samsung Electronics Co. rely on their own evaluations, based in part on guidelines from the Electronic Industry Citizenship Coalition (EICC), which they say are sufficient to prevent abuses." However, "while the EICC sets standards for ethics, worker safety and labor practices, it doesn't require members to disclose findings and it lacks enforcement powers. The result is a disjointed system of self- imposed regulations that fail to hold companies accountable when abuses arise, according to labor advocates and technology executives." Apple has been receiving a lot of attention from the press and worker's rights groups, who are targeting the company with petitions, protests, and threats of boycotts. It appears that most of the other players in the business are able to get away with equally bad (or worse) working and environmental conditions without any comment. As The Loop's Peter Cohen notes, "Where's the outrage from citizen's groups and environmental groups?" The biggest target is always the easiest to hit, so hopefully these groups will begin to focus their attention on the other electronics firms now that they've managed to get Apple to keep an eye on suppliers.
Apple OKs independent environmental audits of suppliers
Just yesterday, we reported on Apple's move to renewable energy at the Maiden, North Carolina data center and other facilities. Now USA Today is reporting that Apple has given the green light to begin independent environmental audits of the companies that make up the Apple supply chain. Apple apparently decided to allow the audits after environmental groups including the Institute of Public & Environmental Affairs (IPE) documented several hazardous material leaks and the use of toxic chemicals at supplier facilities. According to Ma Jun, the founder of the IPE, Apple's decision came in January as a response to the reports. Ma, who is one of China's leading environmentalists, noted that the audits may begin as early as March and will initially focus on two suppliers although the scope could expand to as many as 14 suppliers. Apple wants to publicize the results of the independent review as soon as the suppliers have been given an opportunity to resolve issues, so the company is expected to disclose the names of those suppliers. Apple has already confirmed that it has contracts with seven suppliers named in IPE reports in 2011: Foxconn Technology, Meiko Electronics, Ibiden Electronics, Nan Ya Printed Circuit Board, Compeq Manufacturing, Wintek, and Unimicron. Gary Liu, the deputy director of the China Europe International Business School's Lujiazui International Finance Research Center, said that Apple's audits are a step in the right direction for Chinese workers and the public. Liu was quoted as saying that "Apple now realizes that its brand name will suffer if it continues to be blind to the misbehaviors" of suppliers.
