Case Study - Apple | Course Paper

BPMN3123 MANAGEMENT ETHICS

SEMESTER A192

GROUP N

GROUP ASSIGNMENT

APPLE INC.

CASE STUDY

SUBMITTED TO:

DR. NURUL SHARNIZA HUSIN

PREPARED BY:

NO

NAME

MATRIC NO

1

MOHAMAD FARID BIN ARCHAD

263877

2

ABU DZAR BIN ABD AZIZ

263968

Table of Contents

i Excutive Summary ……………………………………………………………………………………………. 1-2

ii Case Issue Summary …………………………………………………………………………………………. 3-4

iii Discussion ……………………………………………………………………………………………………… 5-17

iv Conclusion ………………………………………………………………………………………………………… 18

v Ethical lesson can be learnt from the case ……………………………………………………………… 19

vi References

1

(i) Executive Summary

Apple Inc. is an American multinational IT company headquartered in California USA.

The company was founded by three good friends named Steve Jobs, Steve Wozniak, and

Ronald Wayne in 1976. Apple designed their own IT products including iPhone, iPad,

MacBook and many more electronics gadgets we can find in the market. Apple main

manufacturing plant are fully operated in China with full supervision from the headquarter in

the US to make sure the finished products are according to the best quality standard set by

Apple offered to their customers. Throughout the years, Apple has emerged among the largest

IT company in the world by creating reliable and dependable products compared to many

others IT companies. Steve Jobs one of the early founders of Apple has led the company

successfully thanks to the strong team who put their best effort to hoist the company’s

reputation until this day.

Apple tend to be a big player in the oligopoly market are mainly because of their constantly

improving products, having strong relationships with distributors, and have a sleek product

design. Now, they are outselling other competitors like Samsung, Huawei, and Sony by

reaching millions of unit sales annually. Another reason why Apple is so successful is because

of their own operating system or software build and design exclusively to be used with iPhone,

iPad, iPod, MacBook, and many other popular apple products.

2

(i) Executive Summary (Continued)

IOS operating system are proven to be secure, easy to use and not having much

problems, that is why it’s becoming preference of choice to be used by many users in the world.

the company target market falls into several categories such as Apple TV for home user,

Macintosh for small to large sized business, iPad for creative individual, MacBook for the

students and iPod for sports activities and music, and iPhone for everyone, of course the target

market are not specifically made and can be interchangeable based on the usage and

preferences.

Since the development of the company, Apple has received a lot of criticism as well as

controversies, but the company is still stand strong and keeping their competitive behaviour

towards other companies. The company CEO, Tim Cook always highlighted about the

company advantage that is Apple is about helping and focusing on the consumer needs and

wants when it comes to technology on a global level. Therefore, the company wants to leave

an impact that can change the life of others around the world through its innovative products

and services offered in the market to be shared by their users to interact with one another.

3

(ii) Case Issue Summaries

Apple are one of the top companies in the IT sector. Apple can be considered as a big

player in the oligopoly market place where we can see there are several other big brands such

as Samsung, Huawei, and Sony who controls the market price of its product. We don’t have to

search for the company details to know about the IT products that the company offers to its

customer widely in the market. since its establishment in 1989, Apple has produced the most

successful product to its customer from iPhone, iPad, MacBook, or MacOS. All these

successful products have its loyal customer who always wanted to keep up to date to its latest

model release. Other than that Apple are also offering its own Operating System or OS unique

only to their IT products called IOS.

This operating system can be only found in apple various apple products to be enjoyed

by its customer. It is different with Samsung and other Android devices where they shared the

same operating system known as the Android. The operating system will be updated to its new

programming from time to time by the Apple company. Today apple has hundred thousand of

employee working under the company from all over the globe that has made the company profit

reaching billions of dollars annually, thanks to the hardworking employees for making Apple

as successful as today.

Despite the company billions dollar of profit, Apple allegedly being accused for

intentionally slowing down its older iPhone models to encourage people buying new iPhone.

This issue arises when some of the iPhone users experiencing significant downgrade

performance of their iPhone device where the iPhone has slowing down after updating to the

new IOS system set by the Apple. The problem is felt by most of the older iPhone models user

around the world which may have seen as a typical problem to some user who can buy new

4

(ii) Case Issue Summaries (Continued)

iPhone to replace the old low performance ones. This issue has gone around as rumours shared

by many iPhone users whether the problem is normal or intentionally created by Apple.

Shockingly in 2017, Apple company has admitted their wrongdoing for slowing down

the performance of old iPhones to its customer when upgrading to the new IOS. Apple at the

same time argued that their action is made just to preserve the aging battery unit inside the

older iPhone that could resulting iPhone to suddenly shutting down to protect other electronic

components from damage. In march 2020, the company was convicted with fine settlement by

French competition and fraud watchdog DCGCRF for mistreating older iPhone owner by

slowing their iPhone performance down and not clearly inform to the iPhone owner that by

upgrading to new IOS system can reduce the device performance.

The fine is estimated to be around 300 to 500 million dollar and apple has agreed to pay

25 dollars to the affected iPhone user as compensation if the company are found to be guilty.

It is not the company’s first time to be fined when in 2018, Apple and Samsung are

simultaneously fined by the Italian competition authority AGCM for 5 million euros for the

same issues. The action is taken by the Apple to grab as many sales as they need to create more

profit for the company.

(iii) Discussion

a. Ethical Awareness

Last year, Apple became the centre of attention in the media. On 18th December, a

company which is known by their research and examining software processor made a post on

a blog that iPhone older version model which is significantly slow compared to the newest one.

The report disclosed that updates of the iOS Apple themselves is to be blamed for slowing

down the devices. Based on the discovery, Apple was forced to be in the crisis mode. Multiple

statements were released by Apple. The very first statement was stating the reason why they

slowed down the devices via updates is to protect the older devices battery.