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In the 21st century, Apple Inc. is a leading corporation in technology. The success of the company is attributed to its high-tech and creative electronic devices like iPhones, iPads and Mac computers. Recently, the company has seen its production diversify into other technical segments such as the watch industry. However, the company's overall output has declined over the last year. The pattern is primarily due to the changing political and legal factors affecting the business.
Political & Legal Factors
The election of Donald Trump as the president of America has seen the enactment of policies which aim to curtail the outsourcing of skilled workforce from outside the borders of the US. The threat of increase tariffs on China may further compel the tech giant to establish the main production base in the US rather than outside the country. China provides one of the most lucrative regions for production purposes given the availability of cheap labor and readily available raw materials to be used in the production processes. Similarly, the limitation of the H1-B visas in the US will see the deportation of several staff members who provided skilled labor in the company and will further curtail the company’s ability to recruit skilled labor from countries such as China (McGee, 2017).
Legally, the company continues to face patent lawsuit from other tech companies (Swartz, 2016). These lawsuits impede the efficient functioning and operations of the company. For instance, the company was the subject of a challenging patent lawsuit from the Nokia company in 2016. The company is also the subject of the enactment of some laws in some States that have seen the increase in minimum wage. Increase in minimum wage coupled with increased limitations on outsourcing may negatively influence the profitability of the Apple Inc.
The Donald Trump administration portends a threat to ease of access that the company had to cheap imported labor. The company will thus be compelled to part with more money in form of remuneration as it seeks to replace the affected employees from within the American job market. The initiative may further curtail the quality of the products which are generated by the company given the increased costs of production which result from the increased tariffs imposed on businesses with production bases outside the country. Similarly, increased patent lawsuits may severe the image of the company. This may shift the loyalty of its customers which would in turn result in less profits for the company. Similarly, tax lawsuits instituted by Federal bodies against the company negate its image in the market and further lead to loss of millions of shillings in form of taxes and settlement fees. Such impediments threaten the stability of the company in the larger tech market.
To overcome the political challenges that threaten its stability, the company is limited to lobbying (Glorioso, 2016). Lobbying entails financing and advocating for laws that will favor the company in the general tech industry. The lobbying initiative comprises an expensive option given that each year has seen an increase in the budget share that is set aside by the company to support its lobbying goals. Reduced profits as a result of the legal and political hindrances may limit the company’s ability to lobby for regulations that favor its operations in the tech industry.
Glorioso, A. (2016). Apple’s appetite for Washington influence keeps growing. Open Secrets. Retrieved from https://www.opensecrets.org/news/2016/01/apples-appetite-for-washington-influence-keeps-growing/
McGee, C. (2017). H-1B limits is 'stupidest policy in the entire American political system,' says Google's Schmidt. CNBC. Retrieved from http://www.cnbc.com/2017/05/04/googles-eric-schmidt-h1b-limit-is-stupidest-us-policy.html
Swartz, J. (2016). Nokia sues Apple for Patent infringement. USA TODAY. Retrieved from https://www.usatoday.com/story/tech/2016/12/21/nokia-sues-apple-patent-infringement/95709378/
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