With its rare apology, Apple Inc went from pariah to praiseworthy in the
eyes of China's state-controlled media, a lesson for other foreign
firms not to underestimate the speed and power of the government press.
coming under near-daily media assault for the past two weeks and facing
the threat of penalties from two Chinese government bureaus, Apple
apologised to Chinese consumers on Monday for poor communication over
its warranty policy and said it will change the terms for some of its
iPhones sold in China.
Greater China is Apple's second-biggest and
fastest-growing market, with sales up almost 40 percent to $6.8 billion
in the final quarter of 2012.
The Chinese newspapers that threw brickbats at Apple a few days ago have since changed their tune.
company's apology letter has eased the situation, softening the tense
relationship between Apple and the Chinese market. Its reaction is worth
respect compared with other American companies," wrote popular tabloid
the Global Times, published by Communist Party mouthpiece the People's
The Foreign Ministry praised Apple for "conscientiously" responding to consumers' demands.
"We approve of what Apple said," spokesman Hong Lei told a daily news briefing on Tuesday.
last week, the People's Daily issued a scathing editorial on Apple's
return policy saying the popular smartphone maker was filled with
Apple was first targeted in mid-March by
state broadcaster CCTV during its annual consumer day segment.
Volkswagen AG , which was also criticised on the same show, plans to
recall vehicles to fix a gearbox problem.
"That Timothy Cook had
to step up and respond from the CEO's chair shows the importance of
China and how critical it is as a market not just for Apple but for
every multinational company here," said Kent Kedl, Shanghai-based head
of Greater China and North Asia for risk consultancy firm Control Risks.
companies who are adept at managing media crises at home find it much
tougher to navigate China where state media outlets, pandering to
different audiences, often have opaque agendas and intentions. Analysts
also said that foreign companies need to remember that the bigger the
brand, the bigger a target it will be, especially in China.
foreign companies need to pay attention to, is that nobody operates in a
vacuum, nobody operates only on the good graces of a brand name ...
Five to ten years ago a report on CCTV would have rippled a little bit,
now it goes viral and has a life of its own," Kedl said.
Not Apple's fight to win
acquiescence in this setting, where the world's largest technology
company by market value was ironically the David going up against
China's Goliath state media machinations, shows its wisdom in not
challenging a more powerful enemy.
Although popular opinion on the
Internet swayed in Apple's favour, against state media and the reported
threats of penalties from China's State Administration for Industry and
Commerce as well as its quality and inspection bureau, it was not
Apple's fight to win, experts said.
Other foreign companies
targeted by CCTV, such as fast food chain operator Yum Brands Inc , have
also apologised and faced scrutiny from government agencies. Last
December CCTV reported that two of Yum's suppliers purchased chickens
from farmers who used excessive levels of antibiotics in their animals.
The report and subsequent investigations hurt sales at Yum's KFC chain.
Apple's situation is somewhat different because CCTV's claim was not
completely new. Last July, a Chinese consumer rights group also slammed
Apple for its after-sales policies. That time, however, Apple held its
With the apology and warranty change, Apple's mea culpa is
significant not just because it comes from a tech firm that rarely
apologises, but also because Apple may be realising that in China, it
needs to be proactive.
"They're out of the woods and into the
weeds. Things will rarely be smooth for Apple in China - even if
consumers love it there will always be factions in and out of government
that are trying to take it down," said Michael Clendenin, managing
director of technology consultancy RedTech Advisors.
it easy this time, but they have learned to be more proactive. The next
time they stumble, it will be easier to recover," he said.
© Thomson Reuters 2013