Analysts weigh in on Apple

Did Apple Inc. do the right thing in apologizing to Chinese consumers after its repair policies were attacked by Chinese government media outlets?
For two straight weeks, the company was criticized by a government-controlled broadcast station and a newspaper, prompting Apple’s CEO to post an apology on the company’s Web site.
“We’ve come to understand through this process that because of our poor communication, some have come to feel that Apple’s attitude is arrogant and that we don’t care about or value feedback from the consumer,” Tim Cook, Apple’s CEO said in a statement earlier this week. “For the concerns and misunderstandings passed on to the consumer, we express our sincere apologies.”

Cook’s apology, posted in Chinese on Apple’s Web site, came after the company was subjected to two weeks of criticism by the state broadcaster CCTV and the government’s People’s Daily newspaper. They accused Apple of arrogance and greed and said the company was throwing its weight around. When Chinese consumers who favour Apple products mocked the attacks, the media criticized the company’s repair policies

The whole episode could serve as a valuable lesson to foreign companies doing business or planning to do business in China, according to three China-based analysts interviewed by the BBC News.

Chinese authorities are used to dictating the rules of the game and do not appreciate companies (foreign and Chinese) that have a stand-offish attitude, said Mark Natkin, managing director of Marbridge Consulting.

He said Cook and his team “understood this very well” and did the right thing by doing something that would help them maintain good relationships with Chinese consumers and authorities.

Natkin said Apple demonstrated that it valued feedback from customers and was prepared to respond humbly.

The analyst also noted that Google Inc. took the opposite route in reacting to the Chinese government. He said the search engine’s decision to move out of China completely stifled a business opportunity in the world’s largest Internet market.


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Duncan Clark, chairman of consultancy firm BDA China, said Apple had the “unenviable choice” of either of apologizing to and placating the state-owned media’s “purported consumer rights campaign,” or standing pat and risking sustained attacks.

He said Apple has enjoyed iconic status in China since it launched its stores and the iPhone in 2009. The attacks on Apple, he said, generated a lot of sympathy for the brand among Chinese consumers.

Shaun Rein, managing director if the China Market Research Group, also thinks the attack actually missed its mark. He said consumer reaction to media stories that target Apple and other foreign brands tend to be “confusion.”

Many feel the negative press is meant to divert attention from more serious matters such as pollution control from state-owned enterprises, according to Rein.

However, he said, the  apology may have opened up Apple to future criticism and may have helped foster the notion that its service and customer relations in China are inadequate.

While Cook needed to make a statement, said Rein, it should not have been an apology. The Apple chief should just have said the company will do everything to follow government regulations and policies.

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Jim Love, Chief Content Officer, IT World Canada

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