Tech wrap: Apple reveals child labor at some suppliers

January 13, 2012

Apple revealed its suppliers in response to harsh criticism that it was turning a blind eye to dismal working conditions at partner factories. Apple’s audit found six active and 13 historical cases of underage labor at some component suppliers. It also found a number of other violations, among them breaches in pay, benefits and environmental practices in plants in China, which figured prominently throughout the 500-page report Apple issued. Other violations found in the audit included dumping wastewater onto a neighboring farm, using machines without safeguards, testing workers for pregnancy and falsifying pay records.

“I would like to totally eliminate every case of underage employment,” Apple CEO Tim Cook told Reuters in an interview. “We have done that in all of our final assembly. As we go deeper into the supply chain, we found that age verification system isn’t sophisticated enough. This is something we feel very strongly about and we want to eliminate totally.”

Enraged Chinese shoppers pelted Apple’s flagship Beijing store with eggs and shoving matches broke out with police when customers were told the store would not begin sales of the iPhone 4S as scheduled. Apple said later after the fracas at its store in Beijing’s trendy Sanlitun district that it would halt all retail sales of the latest iPhone in China for the time being, but said the phones would be available online. Sales at Apple’s other store in Beijing and three in Shanghai went more smoothly, with stocks quickly selling out.

Apple’s next iPad, expected to be released in March, will feature a high-definition screen, run a quad-core chip that allows for faster switching between apps and will work with next-generation LTE wireless networks, Bloomberg reported, citing three people familiar with the product.

Private equity firm TPG Capital is willing to invest about $1 billion in Olympus in a joint deal with Sony or another suitor circling the scandal-hit firm, a person familiar with TPG’s thinking said. So far, TPG has not received any indication from these strategic suitors that they would be willing to work with the private equity firm on a transaction, the source said.

Republican Representative Lamar Smith, the lawmaker behind the Stop Online Piracy Act, vowed to press ahead in the face of fierce criticism from Internet giants such as Google and Facebook. “It is amazing to me that the opponents apparently don’t want to protect American consumers and businesses,” Smith told Reuters in a telephone interview. Smith said Internet counterfeiters cost American consumers, businesses, inventors and workers some $100 billion a year, though critics accuse him of exaggerating. Google executive chairman Eric Schmidt said last month that the bill would “effectively break the Internet” and he compared Smith’s efforts to the same type of censorship that Google has experienced in China.

Telecom operators globally are expected to cut spending on their networks this year, hitting equipment makers that were only just beginning to recover from intense price wars and the last economic downturn. European operators are likely to be more cautious as recession looms and consumers are less willing to splash out on high-end smartphones, while carriers in China and the U.S. slow their frenetic pace of mobile investments. The shift will pressure long-struggling mid-sized gear makers like Alcatel-Lucent and Nokia Siemens Networks, which are more vulnerable than market leader Ericsson or low-cost Chinese player Huawei. Some smaller equipment vendors such as Juniper Networks and Acme Packet have already issued profit warnings, blaming slower spending at big carriers like Verizon and AT&T.

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