Wednesday Grok: Best and worst of Apple on display

And Google gets the green light to swallow Motorola Mobile

The best and the worst of Apple are on display this week. On one side of the coin, its stock cruised through $US500, making Apple the biggest company in the world (but still not the biggest ever). Not bad for an outfit that nearly went broke in the 1990s and was only saved by the good grace (and cynicism) of Microsoft, which desperately needed a viable competitor to ward off antitrust scrutiny at the time.

In addition to its stock price, here's some other big numbers about Apple : The company's market cap is closing in on half a trillion dollars ($470 billion) and it currently has $100 billion in cash. The cash pile is up another $24 billion since Steve Jobs died late last year.

On the other side of the coin, Jobs was the CEO who thought nothing of conspiring with his 'gazillionaire' peers in Silicon Valley to suppress the cost of labour for his US workforce. And famously, he was not shy about taking advantage of the far sighted industrial relations policies in the worker's paradise of modern China. Deng Xiaoping called it “socialism with Chinese characteristics” and Jobs evidently approved. Alas for employees of Apple's partners — partners like Foxconn, first world problems like Jobs’ penchant for anti-poaching programmes are simply the stuff such as dreams are made of.

Now, to overcome the unpleasant stench of its business practices, or at least those of its partners (not that we would ever judge a company by the company it keeps), Apple has appointed an external organisation to monitor and report on conditions.

These are not the droids you are seeking...

Apple's choice of external monitors, however, hasn't exactly filled critics with confidence. The Fair Labour Association has represented other companies such as Nike — also well known for its progressive approach to third world employment. The New York Times quotes Jeff Ballinger, who is the director of labour rights group Press for Change, describing the FLA as “largely a fig leaf” .

Still we should acknowledge that shining a light — even a dim one — into dark places is a step up from Apple's previous behaviour. For a sample of what Grok means, here's a snippet from Wikipedia's entry about Foxconn:“In reaction to a spate of worker suicides where fourteen died in 2010, a report by twenty Chinese universities described Foxconn factories as labour camps and detailed widespread worker abuse and illegal overtime. In response to the suicides, Foxconn installed suicide-prevention netting at some facilities, and it promised to offer substantially higher wages at its Shenzhen production bases. Workers were also forced to sign a legally binding document guaranteeing that they and their descendants would not sue the company as a result of unexpected death, self-injury, or suicide.”

Apple makes great products. Grok's house is bulging with Apple’s shiny, shiny toys. This column was written on his irreplaceable Mac Book Pro, so we guess that makes him partly complicit. But nobody should cut Apple any slack over its record on these matters just because its indentured labourers made prettier baubles than anyone else's. Still, a little shame never went astray.

But of course, not everyone agrees. Just as Grok was submitting this story, a story popped up on the radar — 'Apple beats out Google, Amazon for Highest Corporate Reputation Score' . If you didn't laugh, you'd cry.

Creative destruction cuts both ways

It's been a good week for the tech sector's latter day Zaibatsu with regulators all over the world rolling over to have their tummies tickled. The big one, of course, was Google clearing the regulatory hurdles in the US and Europe for its $12.5 billion acquisition of Motorola Mobile.

As The New York Times pointed out in this piece , there are still a few minor jurisdictional issues to overcome, but the turkey, as they say, is in the oven.

Now that the US government and those cheese eating surrender monkeys in Europe have acquiesced, all those Android mobile phone manufacturers might like to start ramping up their own personal anxiety levels. Somebody somewhere is going to get crushed.

Separately, the Justice Department in the US decided there was no reason to stop Microsoft, Apple and Research in Motion picking over the bones of Nortel Network's patents, or Apple's purchase of various Novel patents.

Cue the musical score from The Lion King…It’s the 'circle of life'.

Andrew Birmingham is the CEO of Silicon Gully Investment

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