Does Tim Cook's stance on gay rights help or hurt Apple's sales?

Results from a study of 2,176 U.S. consumers.

Tim Cook, in case you haven't heard, is gay—not that there's anything wrong with that. But it was an open question when he came out in 2014 whether his advocacy for Lesbian, Gay, Bisexual and Transgender rights would help or hurt Apple's bottom line.

We have an early data point from a study reported in Sunday's New York Times by a pair of academic economists—Aaron Chatterji at Duke and Michael Toffel at Harvard.

Corporations, they point out, have long influenced public policy through lobbying. But CEO activism like Cook's is a relatively new phenomenon.

To better understand it, the professors ran a series of experiments on a pool of nearly 3,400 Americans. In one, they tested the effect of attributing concern about Indiana's controversial "religious liberty" law to several prominent figures, including the CEO of Apple. They found that support for the law fell sharply if respondents knew that Tim Cook was against it.

Then they went one step further.

"Perhaps more interesting," they write, "we asked another 2,176 respondents how likely they were to buy Apple products. We prefaced this question for some respondents with information about Mr. Cook’s discrimination concerns, for others with a description of Mr. Cook’s business philosophy and for the remainder without any preamble. Respondents who were prompted by Mr. Cook’s opposition to the Indiana law—particularly those who supported same-sex marriage—expressed a greater intent to purchase Apple products than did the other two groups. While it might not be the motivation of C.E.O. activists, consumers appear to respond favorably to the companies’ products when they agree with the chief executive’s politics. These consumer gains outweighed, in our study, the consumer losses incurred by those who opposed same-sex marriage and were put off by Mr. Cook’s advocacy."

In other words, homophobes are a market Apple is probably OK to forego.

See also: What Tim Cook's coming out meant to me.

8 Comments

  1. John Kirk said:
    Article was very enlightening. Thanks for that.

    When I read the headline — and before I had a chance to read the article — I tried to formulate an answer to the question posed: Whether or not Tim Cook’s stance on gay rights would hurt Apple. I pretty quickly came to the conclusion that it didn’t matter. Apple’s business model is predicated on obtaining not just customers, but the right kind of customer’s. Usually they are defined as premium or as highly active or participatory. I suspect that if you drew a Venn diagram, there would be a lot of overlap between the circle of people who favored diversity, the circle of people who were affluent enough to purchase an iPhone and the circle of people who are active smartphone users.

    If Apple gets more sales from Tim Cook’s stance, that’s a bonus. Tim Cook was going to express his opinion regardless of the bottom line.

    0
    April 4, 2016
  2. Richard Wanderman said:
    I think it’s an interesting question and while I agree with both John and Joseph I think there’s a bit more to it than Joseph’s first paragraph states. But, before I get to that let me say that I admire Tim Cook and have no problem with both his coming out and his personal participation in gay and human rights campaigns.

    Henry Ford was antisemitic. It’s not conjecture: he published a newsletter to that affect and thought FDR made a bad decision entering WW II; he thought Hitler had a great idea. The cars were cars, they weren’t antisemitic but the CEO most definitely was. Jews decided to not buy Fords and that meme stuck around for many generations (it’s still alive). Same can be said for Adolf Coors and Coors beer (not that anyone in their right mind would want to drink it no matter what). The fact that Jews drive VWs, Audies, and Mercedes cars is another matter and you can bet there are many animated discussions about this around dinner tables.

    The Koch brothers are involved in politics in ways that I don’t like and so, I try to avoid buying products that come from their various companies (Vanity Faire napkins/Georgia Pacific, etc.).

    Personally, Tim Cook’s politics are my politics so if anything, his personal involvement in gay and human rights campaigns makes me want to support Apple even more. But, not everyone shares my political views or his and he does take a calculated risk in being as open as he is.

    Apple has always been known as a progressive company so this is nothing new. Jobs supported liberal politics openly. Still, I think PED’s question is a good one and there’s more to it than simply us liking Tim Cook no matter what.

    0
    April 4, 2016
    • Thanks for the history lesson. It’s so curious! What are the odds that two of the world’s most successful car companies—Ford and Volkswagen—sprang from the mind of rabid antisemites?

      0
      April 4, 2016
      • Richard Wanderman said:
        Indeed. And, when might it be all right (if ever) for Jews to buy Fords? My guess is the current Fords who are a piece of Ford Motor Company don’t share their grandfather’s views.

        As for Volkswagen… my wife drives one and I drove and worked on too many to count (I was an avid fan of The Idiot Book). That was before I had enough money to put in front of my mouth or knew enough to open my mouth.

        0
        April 4, 2016

Leave a Reply