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Zurich, 08.06.2010 The suicide wave at the Shenzhen unit of the Taiwanese manufacturer Foxconn cast its shadow over the European release of the iPad and once again increased awareness of reputational risks combined with contract manufacturing in cheap labor countries. Media Tenor´s ongoing analysis of international TV news shows that although the American media has not yet connected the success of the iPad with the problems of its contracted manufacturer, the coverage of Apple in Germany in the week leading to the sales start was clearly tainted by the bad news. Also, the Google spat with China earlier in 2010 has put the IT branch´s connections with China under the spotlight. The result is a small reminder for communicators that reputation can be influenced by third party issues, especially where cross-cultural and corporate responsibility issues are concerned.

The heavy reporting on the spate of suicides at Foxconn‘s Taiwan operations is part of ongoing Western criticism over the Chinese role in the IT industry. Media Tenor´s analysis shows that personnel issues have recently started to show up in the profile of technology reporting with almost exclusively negative ratings. The result is that Western consumers are slowly being introduced to the conditions under which their gadgets are being produced. “Due to the huge gap in the standard of living between South East Asia and the consumers of high-end electronics, labor issues remain sensitive, even for companies that produce at conditions regarded as above average in the manufacturing countries. Many western consumers do not realize under which conditions goods that they use in their everyday lives are produced“, so Media Tenor Technology specialist Mika Erola, “This is something that has recently become measurable due to the Foxconn story and something which could undermine communication activities and favorable perceptions in the IT industry.”

The Media perception of the China-IT relationship started to sour in Q1 2010 with the high profile Google exit, which directed media attention towards government regulations and freedom of speech. “The Google story was a spat between the regulators and Google“, explains Erola, “now we have a corporate governance issue – and that has the potential to wreak havoc on the reputations of Western companies - just think of what happened to the clothing industry and child labor in the 80´s.”

For a company like Apple the risk is quite high. Media Tenor´s data confirms that Apple is one of those rare companies whose maintains a consistent high profile in the world´s media and enjoys very positive product ratings. The iPad campaign has once again shown the company‘s flair for igniting media interest in its product palette. However, Media Tenor´s profiling of Apple shows television reporting starting to link the company to less positive corporate social responsibility issues. As Erola says, “Apple provides an interesting thought experiment because we can seriously imagine that certain groups of consumers would very quickly lose goodwill on the Asian corporate-responsibility story – the question becomes which level of communication is advisable to counter this negativity and how to proceed when a contract partner poses a risk to the company´s reputation.”

Basis: 15 Reports about Apple in 4 German and 4 American TV News broadcasts between May 24th and May 30th as well as 116 reports about companies of the IT- and electronic industries between January 2009 and May 2010 in Tagesthemen, Tagesschau, Heute, Heute Journal, BBC six o´clock news, BBC ten o´clock news, ITN Early Evening News, ITV News at ten, NBC, ABC, CBS and Fox

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