Friday Rant: One Bad Apple Supply Component — Spoiling the Whole Bin of Products?

You're probably sick of how much I've been talking about Apple and the new iPhone 4 lately, but here's another take.

Apple's sleekly designed and well-made products have become more than a brand -- these days, they've become a lifestyle. For the first time ever, Apple products are outselling those of Microsoft, and sparsely decorated Apple stores are constantly packed with consumers testing the latest wares. We run an entirely Mac office here at Spend Matters, in fact.

Yesterday's release of iPhone 4 was huge. Boasting a new stainless steel casing that doubles as an antenna, video capabilities that I've read rival the Flip camera, and a new Retina display that makes it probably the best-resolution smart phone on the market, what's not to want? Our sister site MetalMiner even wrote a piece touting the Elegant Design: Steel-Bound iPhone 4.

The phone is great on the outside -- but what about when we dig into Apple's supply chain to examine the insides? At a recent opening of a new Apple Store in DC, The Enough Project, a campaign of the Center for American Progress staged a protest, calls on Apple to "commit to providing conflict-free minerals in their products," according to this article. After all, take into consideration that "in every iPhone & and just about every other cell phone for that matter -- comes four minerals essential to manufacturing process of many consumer electronics devices: tin, tungsten, tantalum, and gold."

In other words, rare earth metals are abundant in places like Rwanda and the Congo, where the profits from the mining (to the tune of $180 million) "indirectly fund groups like the Democratic Forces for the Liberation of Rwanda," members of which committed the mass genocide in 1994.

The Enough Project "is calling for three concrete steps that electronics companies should take. Besides tracing their minerals from extraction to use, companies should also audit the mining and trade practices and ultimately certify that the minerals they use are conflict free. Implementing those steps would cost less than a penny per device sold," according to a spokesperson.

And the US Government has responded with "The Conflict Minerals Trade Act," a bill that "requires importers of potential conflict goods to certify whether or not their imports contain conflict minerals and the United States Trade Representative (USTR) will report to Congress and the public which companies are importing goods containing conflict minerals" and "requires industry to use outside auditors to determine whether refiners are indeed conflict-free."

Excellent -- problem identified, regulations created, problem mitigated! Well, not quite. It's not that simple. A person in line for the Apple Store's grand opening suggested simply that "[Apple] could get the same components, but in a different way." In considering problems such as these, one must really take into consideration the complexity of managing a global supply chain.

When we truly break down the steps it takes to get raw materials from the mine and into your iPhone, the process becomes quite complicated, and certifying the raw materials as conflict free would be a costly and deeply involved process. Moreover, if we fully ban the use of conflict metals, where will Apple find alternate sources of these "same components" to keep up with our consumer demand for the Apple products we know and love?

Answers may be forthcoming, but until then, I have to be somewhat cynical and say that the people camping on the sidewalk for their new iPhone 4 probably just want their iPhone 4. Just be sure not to wake them up to tell them about the number of kids in Africa that end up carrying machine guns with bullets paid for by the spoils of their insatiable demand for Apple products.

Perhaps the ultimate solution is to just export AT&T's/Apple's 3G network to the conflict areas in Africa as part of a covert operation to spread peace on the subcontinent. After all, the warlords would not be able to conduct their military campaigns with kid soldiers if their cell calls drop -- or they can't get a signal -- to command their troops.

Sheena Moore

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