June 19, 2024

Labor Rights Group Accuses iPhone Maker of Abuses

The rights group, China Labor Watch, based in New York, said it had found violations of the law and of Apple’s pledges about working conditions at factories operated by the Taiwanese company, Pegatron.

Conditions in Chinese factories that produce iPhones and other popular Apple products have been under scrutiny after complaints about labor and environmental violations by another Taiwanese supplier, Foxconn.

Apple said in a statement that it was “committed to providing safe and fair working conditions” and would investigate the claims about Pegatron.

In a separate statement, Pegatron’s chief executive, Jason Cheng, also promised to investigate. China Labor Watch said its investigation covered two factories in Shanghai and one in nearby Suzhou that employ a total of 70,000 people. It found violations including discrimination against ethnic minorities and women, excessive work hours, poor living conditions, health and safety problems and pollution.

Pegatron assembles products including the iPhone 4, iPhone 4S and iPhone 5 for Apple, according to the report.

Apple said it had confirmed one accusation by China Labor Watch — that the identity cards of some workers were being held by management — and had told Pegatron to stop.

Apple has published a code of conduct for its suppliers and joined the Fair Labor Association, a worker rights monitoring group.

The association inspected Foxconn factories early last year and said in August that improvements it had recommended were being carried out ahead of schedule.

Conditions in factories in China are a sensitive issue for foreign companies that outsource the production of shoes, consumer electronics and other goods to contractors.

In its report Monday, China Labor Watch said the majority of Pegatron production employees worked 66 to 69 hours a week, far above China’s legal limit of 49 hours. It said pregnant women were sometimes required to work 11-hour days, more than the eight-hour legal limit, and employees were under pressure to falsify time cards to conceal the violations.

The group accused Pegatron of “discriminatory hiring practices” including refusing to hire those older than 35 or members of the Hui, Tibetan or Uighur ethnic minorities.

The group said production line workers sometimes dumped water laced with hazardous chemicals from cutting tools into sewers.

Apple, based in Cupertino, California, said it would send auditors to three Pegatron facilities this week to investigate the report’s claims.

The company said it had conducted 15 comprehensive audits of Pegatron facilities since 2007, including surprise audits in the past 18 months. It said the audits had covered more than 130,000 employees.

“Apple is committed to providing safe and fair working conditions throughout our supply chain,” the company statement said. “If our audits find that workers have been underpaid or denied compensation for any time they’ve worked, we will require that Pegatron reimburse them in full.”

The company said its own audit had found that Pegatron employees making Apple products worked 46 hours per week on average.

Pegatron, founded in 2008, also manufactures desktop and notebook personal computers, LCD televisions, broadband and wireless systems and other products.

“We take these allegations very seriously,” Mr. Cheng, the Pegatron chief, said in a statement. “We will investigate them fully and take immediate actions to correct any violations to Chinese labor laws and our own code of conduct.”

Article source: http://www.nytimes.com/2013/07/30/technology/labor-rights-group-accuses-iphone-maker-of-abuses.html?partner=rss&emc=rss

Media Decoder Blog: Qwikster Plan by Netflix Angers Devoted Customers

8:56 p.m. | Updated

Netflix, the company that changed the way tens of millions of people watch films and television shows, is quickly discovering that there’s a downside to having cultivated a passionate fan base.

After Reed Hastings, the company’s co-founder and chief executive, announced a plan — in a blog post and seemingly in a hurry a minute before midnight on Sunday — to split Netflix into two separate businesses, one for Internet streaming and one for DVDs by mail, the company’s Web site was inundated with angry messages.

In many of the 17,000 comments (so far), disgruntled consumers mocked the name of the new DVD company, Qwikster, and predicted its demise. They complained that they would soon have to pay for and manage two separate accounts. And they wondered why Mr. Hastings was apologizing for “arrogance” — but not for disrupting a service that they adore.

“I just got your e-mail, and, as a long-time customer, quite frankly found it to be offensive. And perhaps a devastating miscalculation for your business,” wrote David Isaacson, 47, of Chicago.

The lesson seems to be that all those customers who appreciate low prices, innovative products and lightning-fast customer service can swiftly turn when they feel slighted — perhaps because they know how responsive such companies have been in the past.

JetBlue, a cheery company by airline standards, was pummeled in 2007 when passengers were stranded on planes for up to 10 hours. Apple was battered last year when complaints about the antenna design of the iPhone 4 surfaced online.

Most such customer storms pass — Apple stock happened to close at a record high on Monday — and of course, the complaints ricocheting around the Web may not reflect the sentiment of all of Netflix’s customers.

“We have to take what we’re hearing through social media with a grain of salt,” said Russ Crupnick, an analyst for the NPD Group. “Netflix and Amazon are unchallenged in terms of how pleased customers are with their service. It’s easy to confuse the noisy with the silent majority.”

But in the short term, the risk to corporate reputations is palpable.

“People love Netflix,” said James L. McQuivey, an analyst at Forrester Research.

“What other media distributor adds two-plus million subscribers each quarter? Only Netflix and only because people are thrilled with it. But once you arouse such passions in people, you have to expect that they’ll be equally passionate when they feel betrayed. And that’s what has happened.”

Another customer, Aaron Tone, wrote on Netflix’s site: “it seems to me that companies that truly value their customers make the customer experience as helpful, seamless and easy to understand as possible.” What Netflix had done, he added, was “exactly the opposite.”

Netflix was considered a highflier of Silicon Valley and a business-school lesson in how to make a smooth transition from old technology (sending out DVDs by mail) to new (delivering streams of movies and shows on the Internet). But the company’s stock price has been hammered since it introduced an unpopular price increase — $6 more a month — for its Internet-plus-DVD service this summer.

Netflix cast the pricing scheme as a necessary step that would allow it to keep mailing DVDs and would give it more money to spend on licenses for streaming content.

The change, however, has spurred about a million of its 25 million customers in the United States to drop their subscriptions, the company indicated last week, just the second time in the company’s history that it experienced any drop, and its stock has fallen almost 52 percent since the change was announced.

In his blog post, Mr. Hastings suggested that the next step — breaking up the delivery systems into two separate companies — would allow each to grow and better serve customers. In an unusually personal way, he apologized for the way he handled the earlier announcement, which prompted a similar outpouring from customers. “I messed up,” he wrote, adding that at a time when Netflix was “evolving rapidly,” he did not communicate sufficiently with customers.

But that admission seemed only to increase the criticism and derision in some quarters. Netflix’s stock closed at $143.75 on Monday, down an additional 7.37 percent.

“I have a feeling the apologies are just beginning,” said Michael Gordon, the chief executive of Group Gordon, a corporate and crisis public relations firm in New York. “They’re catching customers off-guard by making huge changes and not providing a lot of explanation for them. It’s been handled poorly.”

Netflix said the Qwikster service would be up and running in a few weeks and would be headed by Andy Rendich, who runs DVD-by-mail now. The company will start renting video games for the first time.

Analysts said the separation reflected the fact that DVDs and online streams had different cost structures and consumer demographics. Still, Mike McGuire, an analyst with Gartner who keeps a close eye on the entertainment industry, described the move as “an unnecessary shift in brand.”

“The red envelope is what it is,” he said. “It doesn’t need fixing.”

Echoing the complaints of some customers, Mr. McGuire said Netflix had not yet delivered on the promise of making the selection of its streaming service as compelling as its DVD-by-mail catalog. “The streaming catalog still only offers a fraction of what is available on DVD,” he said. “Consumers aren’t going to change their behavior if it’s not a better service.”

Brooke Hammerling, the founder of the technology public relations firm Brew Media Relations, said the separation announcement felt as if it had been hastily pulled together.

On Monday afternoon, Netflix did not yet have an official Web site for Qwikster, just a holding page that promised it was “launching soon.”

Social networking users noticed that the owner of the name Qwikster on Twitter was not a DVD distributor but a man with an Elmo profile picture whose page was filled with foul language and drug use references.

“If they were really serious about this and had been planning it for a while, they would have dotted all the i’s and crossed all the t’s,” Ms. Hammerling said.

“They should have taken care of something as silly as making sure a pot-smoking Elmo isn’t the owner of the Twitter account of their new service.”

Article source: http://feeds.nytimes.com/click.phdo?i=0dc41b6965c93e1642289ccbd0293301

AT&T’s Quarter Matches Expectations

ATT, the nation’s largest telecommunications company, reported a 39 percent increase in first-quarter profit on Wednesday, despite the loss of exclusive rights to the iPhone, which it was forced to give up in February.

The company, based in Dallas, reported that net income for the quarter rose to $3.4 billion, or 57 cents a share, compared with $2.5 billion, or 41 cents a share, in the period a year ago. Revenue climbed more than 2 percent to $31.2 billion, meeting Wall Street’s expectations, which expected $31.26 billion on 57 cents a share.

The jump was the result of an increase in wireless data, the company said.

“We had another strong quarter and a solid year,” the chief executive and chairman of ATT, Randall L. Stephenson, said in a statement. “Our major growth platforms — mobile broadband, U-verse and strategic business services — continue to set the pace for the industry, and we’re still early in the growth cycle for all of these areas.”

ATT added 2 million wireless subscribers in the quarter, a slight increase from the 1.9 million that it added in the first quarter a year ago. ATT’s overall pool of subscribers rose to 97.5 million, 12 percent larger than the total a year ago.

Wall Street seemed to respond favorably, with shares rising slightly in premarket trading.

Analysts were uncertain how the loss of iPhone exclusivity in the quarter would affect ATT.

For the last several years, ATT has reaped the benefits of being the sole carrier for the iPhone in the United States. The exclusive partnership has helped build and retain the ATT subscriber pool, as millions of subscribers flocked to ATT.

But beginning in February, ATT’s chief rival, Verizon, began selling the iPhone 4 in the United States.

However, ATT reported 3.6 million iPhone activations for the first three months, a million more than in the period a year ago. Nearly a quarter of the subscribers were new to ATT.

Mr. Stephenson cited other areas, such as wireless data and mobile services, as helping bolster the results. The company said the revenue generated by the areas grew more than 9 percent and now make up 74 percent of its total revenue.

“2011 is the year when we’ll take mobile broadband to the next level,” Mr. Stephenson said.

Article source: http://feeds.nytimes.com/click.phdo?i=55f666477e97620e408d3a07d657d58b