Apple's Eco-Woes Only Boost Market Presence, VARs Say

This time, the spark for all the attention was a looming California lawsuit alleging illegal toxins were found in the phone's plastic earpiece. While Apple doesn't authorize solution providers to sell or service iPhones, many have said the million-plus-seller has created a "Halo" effect on their businesses.

Several of them say they don't think the publicity will add up to any trouble for that part of the business.

"We're seeing people coming into get a Mac because they've just gotten the phone," said Sonny Tohan, CEO of Mac Business Solutions, an Apple specialist based in Gaithersburg, Md. "People coming in from HP or Dell are a little surprised at the level of service." Apple's newfound prominence unmasked it as a target -- not only for hackers, but also for the Center for Environmental Health, an Oakland-based environmental group that alleges the iPhone contains phthalates, a reproductive toxin that can cause birth defects. The group sent Apple a notice of their intent to sue, claiming the presence of the toxin violates California law. Phthalates are banned in San Francisco.

Apple spokesman Steve Dowling says the iPhone meets the standards of the RoHS Directive, and reiterated Apple plans to voluntarily eliminate PVC, arsenic and brominated flame retardants (BFRs) from its products by the end of 2008. Dowling declined to comment on the lawsuit filed by the Center for Environmental Health.

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While the Greenpeace report says the Restriction of Hazardous Substances (RoHS) does not regulate use of PVC and phthalate esters, under California law Proposition 65, all products containing phthalates or carcinogens must carry a warning label.

Allegations of ecological unfriendliness, he notes, had little effect on the company commercially. "We haven't heard too much from anybody complaining about environmental concerns," Tohan says. "If the general public cared about the environment so much, Apple wouldn't have gained in the stock market again this morning."

In late afternoon trading, shares of Apple were up more than $2.50 per share on Nasdaq, to $169.61.

At this point, Tohan says, all publicity, environmentally friendly or not, is beneficial for Apple. "How many other manufactures get their marketing done for free?" he asks. "It is something of a phenomenon."

While Tohan says he believes Apple products could be more environmentally friendly (what tech products couldn't?) they're no worse than any of the other mobiles in the marketplace. "At least they're making an effort to use recyclable materials like glass and metal," he says. "Look at all the other phones out there—they're completely made of plastic."

Others were just as derisive over the environmental brouhaha.

"I'd say it's just a 'jump on the bandwagon' kind of thing," says George Swords, marketing manager at Portland-based PowerMacPac, referring to Greenpeace's allegation. "Who else would you attach it to if you wanted as much publicity as you could get?"

Like Tohan, he's had no customers come in with environmental concerns regarding other Apple products. "Apple works hard at their environmental friendliness," Swords says. "This is a very very minor issue."