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CHANGES, ETHICS AND CULTURE

at Apple Inc.

A CUEGIS Report (Draft)

Compiled by Kenny Yin

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* Due to time constrains, Kenny is only able to construct a draft copy of the homework report. Grammar errors, spelling mistakes, awkward use of
language may be present. Please keep in mind that this does not represent the overall quality of Kennys finished works.

CHANGES AT APPLE
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As we reconsider something, our purpose is to create an experience
thats simpler, more useful, and more enjoyable while building on
things people already love about.
- Apple

MANAGEMENT SHAKEUP (LATE 2012 TO EARLY 2013)

Scott Forstall is an extremely valuable asset to Apple as he led the software design
and development for multiple commercially successful products - OS X and iOS, as
well as their corresponding SDKs (Software Development Kit), Xcode.
Although he has some extremely insightful gifts, such as the ability to evaluate
software usability from a beginners perspective despite working on them for an
extended period of time. However, according to various people familiar with the
matter, such as previous Apple employees, it is known that Scott is also extremely
self-oriented and bad-tempered, caring little or even nothing about cross-team
collaboration, causing other senior managers, most notably the leading designer
behind all Apple products, Jonathan Ive, to refuse staying with Scott in the same
room unless Apples CEO Tim Cook is present.
After causing the Maps fiasco and refusing to sign a public apology letter, in
September 2012, Apples board of management made the decision to shake up
management structure by firing Scott Forstall despite his enormous contribution to
Apples previous success. His jobs are then given to Jony Ive, Craig Federighi and
Eddy Cue. Jony takes charge of software aesthetics design, Craig takes charge of
software coding and development, and Eddy takes charge of crowd-sourced mapping
database and artificial intelligence system, Siri. Altogether, they brought Apples
different departments closer together. The same application or frameworks on
different platforms are now developed and maintained by the same group of
engineers. One of the most visible results to this change is Apples different products
can communicate to each other in ways that is not possible under previous
management structure, such as the ability to hand off tasks when devices are in
proximity and the ability to relay phone calls and messages to different devices.
After the management shakeup, Apple also adapted a friendlier public image. For
example, management teams are more open to accepting public interviews and
interactions with the public. Most notably, Apples senior vice president of software
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engineering, Craig Federighi, publicly pokes fun at Apple itself during media events,
such as joking about his hair (Hair Force One!) and secrecy measurements at Apple.

ENTERING THE FASHION MARKET (MID 2014 TILL NOW)

Apple announced purchase of Beats Electronics at May 2014, one month before its
annual WWDC (WorldWide Developer Conference) with $3 billion. Although Apple has
plenty of previous records on buying smaller companies or startups, this is the first
time Apple has spent huge amounts of its cash deposit to buy such business. Beats
Electronics is mainly known for its electronic music accessories, such as earphones
and speakers. It is well-known that Beats productions have higher fashion value than
actual technical value. Previously as a technical-oriented company, Apples move of
purchasing Beats can be seen as one of the first steps of an attempt to enter the
fashion market.
Apple also hired Angela Ahrendts, Burberrys previous CEO who led the company
through a period of outstanding global growth, as president of retail and online stores
to better market Apple products to fashion-oriented customers.
Apples purchase of Beats electronics also coincides with its later announcement of
marketing its watch product line not only as digital gadgets, but also as fashion
accessories. The addition of Apple Watch Edition, which presumably costs more than
$1500 since its made of premium materials such as 24-karat gold. Apple Watch also
made its appearance on multiple fashion magazines, such as VOGUE China. This
sends the signal to public loud and clear - Apple is not only producing electronic
gadgets any more. It has a much wider ambition of entering the fashion world.

ETHICS AT APPLE
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All over the world, were expanding opportunities for workers and ensu
-ring that theyre treated with respect and dignity.
Supplier Responsibility Report, Apple

FOR THE FUTURE - ENVIRONMENTAL RESPONSIBILITY

After environmental-oriented pressure groups continuously criticise Apples use of un
-renewable energy in its iCloud Data Center, Apple realised its mistake and invested
more than $1 billion to deploy environmentally-friendly power systems in its data
centers, such as solar panels and wind-turbines. However current technologies limit
the durability of such systems. According to analysts, these systems will stop
functioning long before the costs and benefits break-even.
Apple also saw its own continuous effort in becoming more environmentally friendly
as an competitive advantage, launching campaigns, such as We want to leave the
world better than we found it. Apple also took the chance to poke fun at
competitions who rip off their products designs, featuring advertisements about their
innovation on being environmentally responsible on newspapers with slogans Heres
some ideas for everyone to copy.
Apple also depreciated the use of harmful chemicals from their products by
designing their products with cleaner, greener materials, such as replacing PVC with
nonchlorinated and nonbrominated thermoplastic elastomers in power cords and
headphone cables, using LEDs instead of fluorescent lamps to backlight Apples
computer lineup. Apple also internally tests for toxins with X-ray fluorescence
spectroscopy and ion chromatography. As a result, Apple markets their products are
better for the environment, better for people who use them and better for people
who make them.

FOR PRESENT - HUMAN RIGHTS AND EQUALITY

According to demographic data, more than 50% of all employees at Apple HQ are
white people and 70% of all employees are male. Both of these data are slightly
higher than industrial average, but still lacks diversity.
After Apples suppliers being exposed for multiple times on newspapers and TV
stations for labour abuse, use of child labor, excessive working hours and poor
working condition, Apple responded and started investigations to deploy more regular
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inspections, provide training courses for suppliers employees to bring more ethical
employment approaches than previous years.
However, the ignorance of human rights is not only present at Apples suppliers, but
also within Apple Cooperate (although to an arguably lesser degree). Employees often
receive emails during mid-night and are expected to reply within an extremely short
amount of time. This mentally condensed and physically intensive workflow seems
rewarding but extremely challenging from Apples perspective, but employees do
express their rising concerns about human rights.
Under the new leader, Tim Cook, Apple is seemingly to care more about human rights,
as seen from them sponsoring Human Rights Campaign, the largest LGBT rights
organisation in United States. Tim even went to extreme lengths, such as shutting off
anti-environmental investors during an investor call with we do a lot of things for
reasons besides profit motive," and recommending that anyone who had a problem
with that should get out of the stock.

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FOR PRESENT - CUSTOMER PRIVACY
Despite US government agencies constantly reaching out technological businesses
and pressuring them to add back doors to their software or service, Apple pays an
continuous effort to refuse cooperation with such agencies. Certain judges in federal
agents even went to extreme lengths to pressure Apple, such as claiming A child will
die due to filesystem encryption after Apple added automated, hardware accelerated
full-filesystem encryption and no longer stores encryption keys, so that even if law
enforcement presents a physical iOS device to Apple and ask Apple to extract data,
Apple is unable to decrypt any data from it as long as the device has a password lock.
Unlike alternatives, Apples digital wallet system, Apple Pay, does not store credit card
number or security codes on devices or Apples servers. Instead, Apple uses various
technologies, such as generating nonce-based tokens specifically for every
transaction where only bank receives detailed information while Apple itself only
receives approximate time and location for diagnostics usage. Other Apple services,
namely FaceTime and iMessage are also built on the foundation of similar
technologies to ensure secrecy and privacy.
Independent security researchers have mostly verified such claims through
techniques such as extracting Apples software installation package, then
decompiling executable binaries to examine them.

CULTURE AT APPLE
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One powerful thing we share is the belief that we can make a diffe
-rence in the world. Through our products. And through our values.
Through who we are.
Inclusion Inspires Innovation, Apple

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THE GOOD - PUSHING THE ENVELOPE

Apple pushes the envelope whenever possible. This means forever asking, Why is it
this way? and How can it be better?. It means to rethink customer experience until
the clutter falls away until all that remains are essentials. Throughout Apples
business life, it never actually lead development of completely new technologies.
Instead, Apple often waited until technologies are mature enough to ensure usability.
For example, Apple implemented multitasking on iPhone (on user-land level, of
course) a few years after competition because they did not want to sacrifice
performance or (the already not-so-excellent) battery life. Instead, they took the time
to implement a system that makes little sacrifices. They also made a bold decision to eliminate swap files to make memory management as aggressive as possible so
that 3rd party developers will not abusively use iOS devices RAM. In addition to future
ones such as dropping full-sized USB ports and recent ones such as dropping optical
drives throughout computer lineup, Apples fondness of bold decisions dates way
back to the 1990s, where Apple first dropped floppy drive on its desktop computer.
While pushing the envelope is mostly beneficial, there are definitely drawbacks for
doing so. It may compromise other aspects of Apples products. One of such
examples is Apples obsessive with products thinness and lightness. Apple breaks
the record of thinnest smartphone on planet with every years iPhone lineup refresh.
Thinness is not bad, but between a good battery life and crazy thinness, Apple prefers
thinness within a heartbeat. As one of the industrial leaders in electronic gadgets,
competition often follow up and start having a thinness-war, bringing little
usefulness to customers. Apple analyst Marco once shared his thought on such
matter - Unless it comes one day where you can have a paper cut from your iPad or
iPhone, Apples obsession with thinness wont end.
Also, about that lightness - Have you ever wondered why are there two thick, ugly
antana breaks on the back of iPhone 6? Thats also an indirect result of Apples
obsession with lightness.
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THE MEDIOCRE - SMALL START-UPs

Inside Apple, employees are often devised into small teams, consisting of a relatively
small amount of manpower. This has been embedded in Apples DNA since decades
ago. As an example, Apples hardware designing team, designing all aesthetics and
architectural aspects of all Apples hardware products, only consists of 15 employees.
While It can be argued that breaking a business as huge as Apple into smaller start
-ups can enable better concentration, it also makes collaboration and
communication arguably more difficult between different departments.
As an example, Apples peer-to-peer file wireless transfer service under its mobile
operating system and desktop operating system shares the same marketing name,
AirDrop, but they used to work extremely differently (one based solely on peer-to-peer
WiFi and the other one basing on Bluetooth Low Energy and WiFi direct). A a result,
they were incompatible with each other for over 14 months, causing confusion
among users. One of Apples telephone support operators shared his experience, I
have got no less than a thousand calls over this confusion and it is really difficult for
me to explain reason behind their incompatibility.

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THE UGLY - HOSTILE PUBLIC RELATIONS
Unlike other companies that encourages, or at least does not discourage public
interaction between development teams and users (or 3rd party developers), Apple
builds a strong, brick wall to prevent such communication. This is embedded in
Apples culture, dating way back to the 1990s. This approach has been widely
criticised, especially among 3rd party developers.
As an example, while Apples software get more and more complicated, this hostile
approach when dealing with developers has led to a gradual decline in Apples
software quality. For example, its bug reporting system, internally codenamed radar
is designed to be opaque and unfriendly. It still features an user interface that is
inconsistent with the rest of Apples other software
Bug reports and feature requests filled by developers with their own precious time
falls into a gigantic black hole. Apple usually does not respond to such reports at all.
In fact, developers reports are either left open or marked as duplicate. When marked
as duplicate, developers lose track of their report and cannot follow-up any more.
Developers can also not search, or vote on reports sent by other developers..

From the outside, It seems like Apple cares little about such reports. However, from
the inside, these are simply the result of Apples extremely small developer relations
team, consisting less than 20 employees, while other leading technological
companies has hundreds of employees dedicated to such matters.
Although as a cooperation, Apple has a culture of being mysterious and unreachable,
most employees within Apple cooperations have completely different personalities.
They are just like every other human being on planet earth, where they are friendly,
helpful and enthusiastic. And they are extremely glad to help users and developers to
solve their issues. However only based on one prerequisite - if you can reach them.
And usually, you cant. Unless you are their friend or family, of course.

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Information discussed in this report may directly come from Apples public website or marketing resources, 3rd party news and rumours sites such as MacRumors, 9to5Mac and BusinessInsiders. Some information are
paraphrased from speech or conversations of people who has experience of working at Apple, or who has been in touch such people. Certain comments are collected from analysts, including but not limited from John
Gruber and Guy English. Kenny is not responsible for the accuracy of discussed information, and such information should only be perceived as references. Company names and product names are trademarks of their
respective owners.