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Will Foxconn Impact Apple’s Customer Loyalty?

January 30, 2012

I had intended today’s post to link Apple’s astonishing quarter with their Net Promoter Score and their focus on it:

One theory behind NPS is that customer experience drives loyalty, and that in turn drives repeat business and profit. A case can surely be made that loyal Apple customers are repeat customers who buy more iPhones and iPads and iEvertthingelse, leading to explosive growth and nearly $100 billion in the bank… However, other news about how the company makes products and profit took the shine off Apple last week.

Two New York Times stories…

How the U.S. Lost Out on iPhone Work
In China, Human Costs Are Built Into an iPad

…examine Apple’s relationship with its Taiwanese contract manufacturer, Foxconn. The articles detail why Apple made the decision to move much of its manufacturing from the U.S. to Asia, and the reported working conditions of some 700,000 Chinese employed by Foxconn.

Apple is not unique in their employ of Foxconn. Many other U.S. and foreign tech companies partner with Foxconn and other like it because of their low costs, efficient supply chain and skilled labor pool. Some of these competitors will see this as an opportunity to damage Apple and will seek advantage from it. As the media machine hums, calls of “boycott” begin to rise, and with tens of thousands of Apple consumers socially conscious regarding purchase decisions on everything from coffee to eggs to beef, it will be interesting to see how Apple manages this issue and how many NPS detractors will emerge among their customers because of it. Apple’s future revenues and profit are highly dependent on their ability to handle this crisis in an “insanely great” way.

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