With the release of the Apple keynote and the announcement of new iPhones today, professor Jonathan Sterne’s article “Your new iPhone will soon be trash, and that’s the point” provide profound insights to Apple’s business models. In the article, Sterne suggests that Apple updates the iPhone line with a fresh look annually to make its customer think that their older iPhones are out of date. The elimination of headphones jacks on the iPhone 7 and Apple no longer supporting older models are both examples of Apple luring its consumers to purchase their new products. Anecdotally, I found that older models of the iPhone runs smoothly on an older iOS, but lags significantly on a newer iOS. This design perhaps aims to take advantage of the more power new chips while promoting the users of old iPhones to buy newer models. Notably, the article claims that Apple stated that “their ideal lifespan for an iPhone is about three years”, and has gone as far as stating that “The company that designed your new gadget already imagines it as future trash.” Considering that the price of the new iPhone X ranges from $1,319 to $1,529 CAD, this marketing strategy that aims reduces the lifespan of these expensive gadgets raises an issue of business ethics. In fact, this business strategy contradicts Edward Freeman’s stakeholder theory, which suggests that managers should aim to benefit all stakeholders, rather than maximize shareholder wealth. Noting Freeman’s comment on how all stakeholders should have a common interest in order to make “capitalism tick”, and I perceive this marketing strategy of Apple as a portion of the stakeholders trying to lure the customers into sharing a common interest. While this strategy does not break the law or cause fraud, it is targeted towards benefiting the company and its shareholders at the cost of its customers. In this sense, the company’s managers has failed to achieve their social responsibility, especially noting that the production and disposal of iPhones are both economically and environmentally costly. Ultimately, while from a financial perspective this strategy may be beneficial, the ethical concerns of unnoticeably influencing consumer decisions is fairly significant.

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