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Hyundai confirmed in a brief statement last week that it was in early talks with Apple about the cars. Almost immediately, the Korean auto giant retreated, releasing a subsequent statement that removed all mention of Apple.
Hyundai’s retreat is certainly the latest result of Apple’s emphasis on confidentiality and discretion from its suppliers or potential partners. Companies that deal with Apple are held to strict unlawful agreements, even if they are public companies and Apple is a major customer.
While nondisclosure agreements are common in high-tech, people who work with Apple say it takes confidential information more seriously than competitors. Apple tells those partners that they cannot refer to Apple publicly or in the media, according to people who are not identified to avoid jeopardizing their relationship with Apple. One person who worked with Apple described their privacy requirements as jumping through a lot of hoops.
In at least one case, the supplier has threatened to pay suppliers $ 50 million for each individual leak, according to a contract by GT Advanced Technologies that went public as part of a bankruptcy proceeding.
Some companies may engage in limited discussion of their business with Apple, especially if Apple has publicly spoken about and approved the relationship. An example is Corning, which supplies glass for iPhones. Apple has paid the company at least $ 450 million since 2017 and highlighted it in its own press release supporting it as an example of an American manufacturing company.
But its CEO said that earlier this year he was not comfortable talking about the affair, until Corning’s new strong glass was mentioned during the recent iPhone 12 launch LiveWream.
“I have to tell you that it’s not right to use Apple’s name out loud. I still don’t think I’ve ever done that. Inside the company, we have a codename for Apple, we’ll never say ‘Apple.’ ‘No say. Inside the company, “Corning CEO Wendell Weeks said in October on an earnings call. “So, if you can see me, I think I’m getting a little pink and I’m having anxiety attacks, if I read their name out loud.”
Why Apple Loves Privacy
Apple’s obsession with privacy is one of its defining aspects – some Silicon Valley insiders jokingly call it a “fruit company”. In 2011, Apple sold a shirt at its campus gift shop stating that “I visited the Apple campus. But I’m allowed to say that.”
Apple’s secrecy may be tied to its founder, Steve Jobs, who insisted on it. Jobs was a master marketer who presented the product launch as a spectacle, often relying on surprise to sustain the show while discussing new products.
Today, Apple still relies on “surprise and delight” during product launches, which remain an important marketing strategy – Apple to release new Apple Watches, iPhones and Mac laptops three different this fall -Different launch keep livestream. The three productions attracted millions of viewers, who joined YouTube to hear directly from Apple executives about their new products.
Apple considers details about unrelated products to be “one of its biggest assets”. In Apple’s Business Conduct Policy since October, it states that employees must be “very selective” when disclosing Apple business information to vendors or suppliers, and they should do so only after a nondisclosure agreement. The handbook also states that suppliers should follow Apple principles such as privacy.
“When a business is required to share confidential information with a supplier, vendor or other third party, it is never more volunteer than necessary to address the business as per policy”. “Any confidential information shared outside of Apple should be covered by a non-disclosure / confidentiality agreement.”
Despite the layers of NDAs and the limited ability to publicize a customer’s win, many suppliers jump at the opportunity to sell to Apple.
Audio chip maker Cirrus Logic said in an SEC filing in March that Apple accounted for 81% of its total sales in FY 2020, to $ 1.28 billion.
Nevertheless, Sirus officials rarely said Apple’s name, and for years they avoided it altogether. In 2017, an investor presentation featured a variety of slides from their clients. Apple’s logo was not found anywhere. Instead, the cirrus slide included a picture of a brown box with the words “# 1 customer”. Recent investor slide decks only state that Cirrus Logic supplies the top seven smartphone manufacturers.
John Forsythe, President of Cirrus Logic said, “Before we start the Q&A, I would also like to note that when we understand this intense interest related to our biggest customer, according to our policy, we Don’t discuss business relationships. ” On a conference call with analysts in November, as the company regularly says before discussing its earnings. In response to a question for this article, a spokesperson for Cirrus made the same statement.
Other public companies also use euphemisms when they have to discuss the iPhone manufacturer’s business. Last June, Broadcom CEO Haw Tan said the iPhone 12 would be released later than usual after discussing its wireless revenue projections. However, he did not mention Apple – he talked about “our big North American mobile phone customer”, even after a previous deal with Apple filling an SEC filing with merit details in merit Was enough for
In 2014, the bankruptcy proceedings revealed how Apple required confidentiality for its suppliers. In 2013, GT Advanced Technologies entered into an agreement with Apple to provide raw sapphire balls to make scratch-resistant iPhone screens. GT was unable to manufacture Sapphire at its Apple-owned facility in Arizona, and declared bankrupt, making Apple a major creditor.
During the bankruptcy proceedings, GT submitted a contract labeled Confidential stating that GT would have to pay $ 50 million per leak. Three separate confidentiality contracts were mentioned in the contract, to which the sapphire manufacturer agreed. GT also stated that the terms of its confidentiality agreement were required to be kept secret.
Another contract states that any promotions involving Apple will require written approval.
Apple settled with GT shortly after the leaked $ 50 million fine was revealed. One condition of the agreement was that GT would keep “details of its relationship with Apple” private.
Apple declined to comment for this story.