Imagine Apple As A Country!
The world’s largest corporations presently create a significant amount of the global GDP, with names such as Microsoft, Google, and McDonald’s becoming part of a child’s vocabulary very early on, even if that child lives in a far-flung region of the world. Facebook announced this year it has 2 billion users, which is quite a chunk of the 7.5 billion folks currently residing on planet Earth. In 2015 ForeignPolicy.com listed the top 25 corporations, with Walmart filling the number one spot. Its 2.2 million employees are more than the entire population of Slovenia. Nestle, in ninth place on the list, has factories in 86 nations, but what’s more incredible is that Nestle goods are sold in every single country in the world. ‘Ok’ is the most universally recognized word, but Coca-Cola isn’t far behind.
Let’s first see how it all began.
How did Apple move from an idea in someone’s head to a household name?
If you’ve seen a number of movies and documentaries made about the company, you’ll know it was started by Steve Jobs and Steve Wozniak in 1976. As the story goes, Wozniac was the engineering ace and Jobs was a man of ideas with a brilliant acumen for marketing those ideas. The two tinkered with personal computers, sometimes spending huge amounts of money on advertising that told the consumer that buying an Apple product was tantamount to escaping the clutches of vapid consumerism. Some people got rich early, especially investors, and then Jobs left the company. It wasn’t until Jobs came back in 1997 that Apple would begin chartering a course towards gadget global supremacy. You know the story from here, in which products such as the iPod, iMac, iPhone, as well as the iOS operating system, would revolutionize the computer industry.
So now let’s have a look at the behemoth that Apple has become.
Statistics for 2016 tell us that Apple currently employees around 116,000 people. According to the United Nations Population Division, one country in the world has the same population as Apple has employees, and that is the island nation of Kiribati in the Central Pacific. This paradise on Earth however is vastly underdeveloped, and has a current GDP of around 600 million dollars.
That is a little less than Apple lost in 2016 after losing a patent infringement case. Apple can afford a loss to a patent troll, with revenue for 2016 at 215 billion dollars. This meant that annual profits for Apple that year were 45.7 billion dollars. If Apple were a country and it decided to share its profits with every person in the country, each person would receive a check for around 380,000 dollars.
If we compare Apple’s 215 billion GDP to a country’s GDP, according to the 2017 forecast by the International Monetary Fund World Economic Outlook, Apple would be equal to the country of Vietnam. It would also be a bigger GDP than many developed nations, including Finland, New Zealand, Portugal, and the Czech Republic. Even Apple’s actual profits of 45-plus billion is about the same as the projected 2017 GDP of Macao, and much higher than many nations on Earth.
How does Apple make this incredible amount of money?
Let’s have a look at a few statistics concerning Apple’s worldly successes. Firstly, over one billion people currently use an Apple device. Apple’s best-selling product is its iPhone, and in itself this device had sold more than one billion units as of July 2016. In the first quarter of 2017, Apple reported its sales of iPhones to be almost 52 million units, the most phones a company had sold except for Samsung. Perhaps it’s amusing then, that the 52 million iPhones sold in just a few months is close to the number of people living in the country of South Korea – the home of Samsung. In all, Apple sold around 212 million iPhones in 2016. The Mac was selling anywhere from 4 to 5.4 million units a quarter in that same year. As of April 2017, there were around 100 million active Mac users.
What does all this mean in terms of Apple’s current worth?
It means a price tag of about 800 billion dollars. It also means Apple has savings of around 250 billion dollars, most of which is held in banks outside of the USA. This is staggering for a company, but still nowhere near the number one global trading company from yesteryear, which was the Dutch East India Company. It’s thought, in terms of dollars today, at its height the company would have been worth 7 trillion dollars.
So, if Apple really was a country, how would it function?
To start with, there would be a huge wealth gap in that country. The top Apple executives, which we could call the unelected leaders of the country, would be taking the lion’s share of wages. In 2016, the base salary for top executives, or the vice presidents, was 2.7 million dollars, but with awards and stock this meant those execs were paid almost 23 million dollars each. CEO Tim Cook was paid a salary of $8,370,000, which was 1.6 million less than he got in 2015. Apparently Cook missed his targets…
Let’s call this group the leaders and the top ministers in this decidedly undemocratic nation. Down the ladder are senior managers, with a senior director, according to Glassdoor, earning a wage of around 280,000 dollars a year. A Senior Product Marketing Manager will be paid around 180,000, an experienced software engineer about 170,000, and an Information Systems Manager around 160,000. If we remember, we are a country of around 116,000 people.
What are all the little guys being paid?
Apple Family Room specialists working in the USA are paid around 15 dollars an hour, but they will also receive bonuses. An inventory specialist will receive about 32,000 a year and a nurse at Apple will get something close to 16 dollars an hour. But these are US wages, and many of Apple’s manufacturing plants are based in China. We must state though, that most of these employees are not actually employed by Apple, but Chinese manufacturing firms that make Apple products. Apple indirectly employees millions of people, and we can’t ignore that these people are contributing to this very rich, small country. Some of these factories making Apple products were once made infamous after reports surfaced regarding them installing suicide nets so employees couldn’t jump to their death. Apple’s fortunes, unfortunately, don’t trickle down too heavily on the net-protected Chinese workers. According to a 2015 China Labor Watch report, employees at Foxconn and Pegatron factories didn’t have it easy. 70 percent of people interviewed in the report worked 60-72 hours a week and were paid less than 2 dollars an hour. They worked mandatory overtime, weren’t paid for meetings, and due to such small wages, many of them lived in cramped dorms close to the factory. One undercover worker said he was asked to work 18 days in a row and sometimes 16 hours a day. He told the BBC, “I was unable to sleep at night because of the stress.”
With this in mind, we can see why the iPhone makes so much money. To put the unit together doesn’t cost very much. According to reports, the total cost to make a 32GB iPhone 7 is $219.80 for the actual phone, and only another 5 dollars in labor. A base model iPhone 7 will cost around $649, so this gives Apple a profit of $424 on each of the many millions sold. All kinds of costs and overhead will eat up that profit, but the iPhone is still a massive generator of income. According to an IHS Markit report, Apple makes around 250 dollars in profit for every iPhone 7 sold.
Bearing this in mind, if Apple was a country it would reflect most countries which have an aggrieved group of people calling for more economic equality and better working conditions. Apple is doing what any business does, and maximizes profits. Countries have labor watchdogs, economic philosophers, social activists, etc, and Apple has corporate and supplier responsibility guidelines. In 2017 Apple reported that its suppliers now comply with a 60-hour maximum workweek, and Apple said it also made sure 11.4 million workers outside the U.S. were trained about their labor rights.