Iphone and Ethical Issues

On June 29, 2007, Apple Inc. launched sales of the iPhone at Apple and AT&T stores across the country. Many hours earlier, enthusiastic customers lined up outside stores to get the first iPhone in their hands. The iPhone is more than just a breakthrough mobile-phone device. It is a strategy that may expand Apple’s sphere of influence. Apple elegantly combined a mobile phone, mp3 player, and personal digital assistant (PDA) on the same machine characterized by its unique, innovative design.

On July 26, a class-action lawsuit was filed against Apple over the iPhone battery. According to the lawsuit, Apple did not disclose that the batteries of the iPhone were not user-replaceable. Apple faces criticism because it did not disclose the actual cost and inconvenience of replacing the battery until three days after the iPhone’s release. Also the lawsuit alleges that the battery can be charged only 300 to 400 times. This means that the battery needs to be replaced approximately every year. The iPhone’s battery is encased in the phone and can be removed only by Apple, which will replace the battery for about $85.95, including shipping and handling. Furthermore, when a battery needs to be replaced, the customer will be without a phone for several days unless the customer pays $29.95 for a loaner phone. Lastly, the plaintiff alleges that the battery information was difficult to find on Apple's website. In sum, the fact that Apple did not immediately communicate the exact cost of replacing the battery, along with the fact that the iPhone battery is not replaceable by users, has generated an outrage among iPhone users.

The first ethical dilemma is related to the fact that Apple directly sells the iPhone to customers, which means that no retailers can buy the iPhone in bulk. Consequently, whatever price Apple sets becomes the market price. Apple can easily control the iPhone price by controlling its availability. Unlike rebates or discounts available with other mobile phones, customers are charged fixed prices of either $500 or $600 per unit. By comparison, most mobile phone manufacturers sell their phones to retailers in bulk. This practice allows retailers to sell devices with rebates or discounts.

The second ethical dilemma is related to Apple’s failure to disclose the fact that the battery needs to be replaced after 300 to 400 charges and that customers must surrender their iPhone to Apple for replacement. The iPhone is not a just mobile phone; it is a power hungry device equipped with a touch screen, colorful user interface, portable mp3 player, web browser, PDA and more. Owners of all other mobile phones can purchase and replace their batteries themselves and without risk to the device. By contrast, iPhone owners find it is extremely hard to open the iPhone case. The iPhone’s battery is glued to the unit, and the wires from the battery to the circuit board are soldered. This clearly shows that Apple does not appear