Apple's formal apology yesterday to the people of China may not be enough to dissuade China's government from its continued attacks on the company. But if the immediate response is any guide, it should be enough to let Apple keep building out its business in the world's largest mobile computing market.
Following a damning and highly visible attack by state-owned China Central Television that accused Apple of "arrogance" for allegedly providing shoddy service to its Chinese customers, CEO Tim Cook publicly apologized.
According to Bloomberg, Apple's apology is a rather common "rite of passage" for large foreign businesses in China.
Corporate mea culpas have become a rite of passage for international companies criticized by China Central Television, including Volkswagen AG, Carrefour SA (CA) and Yum! Brands Inc (YUM).
The network beamed its program on Apple to more than 1 billion people just hours after Li Keqiang, who has pledged to root out consumer abuses, was named premier. The state-run People’s Daily followed with more than a dozen articles at a time when China struggles to cope with poisonous food, air pollution, government corruption and thousands of dead pigs floating in Shanghai’s drinking water.
The importance of the Chinese market to Apple is hard to understate:
While the iPhone has only a small share of the Chinese smartphone market, Apple has been moving aggressively into the country. In the last fiscal quarter alone, Apple generated $6.83 billion in revenues from the Chinese market (including Hong Kong and Taiwan). China is currently Apple's second largest market by revenue, though CEO Tim Cook has predicted that China will become Apple’s number one market soon.
Everyone Hates Apple... Until They Don't
Apple needed to defuse this situation as best it could. In addition to Tim Cook's apology, Apple pledged to improve its customer support policies, better train its official Apple resellers in the country and to enhance warranty policies for the iPhone 4 and 4S.
Moreover, Cook's apology was noticeably personal:
In the process of studying the issues, we recognize that some people may have viewed our lack of communication as arrogant, or as a sign that we didn’t care about or value their feedback. We sincerely apologize to our customers for any concern or confusion we may have caused.
This may be enough to satisfy Apple's customers and potential customers in China, and could limit anger and complaints about the company across popular social media sites as Weibo. As Reuters noted, shortly after the apology, another official Chinese newspaper, the Global Times, remarked that Apple's reaction is "worth respect compared with other American companies."
Perhaps, though Bloomberg notes that the many attacks on Apple from official Chinese government outlets were "more severe" than in the cases of other foreign companies.
Cook, who has visited the country twice already during his short tenure as Apple CEO, will likely make additional visits to smooth official feathers. He will no doubt also remind the government of Apple's contribution to the Chinese economy. During his last visit to China, for example, Cook singled out for praise the many Chinese partners and manufacturers that Apple relies on to manufacture its products for sale around the world.
Tim Cook, PR Man
Cook's apology is a wise move. Apple needed to let the public know that the company was committed to the China market and that it treats its China customers the same way it treats others — by, for instance, offering new replacement phones instead of refurbished models.
The timing of the apology was also critical. Apple could not afford to lose the narrative. According to CNN, even after the many negative stories by state-run media, Apple's customers and admirers within the country are still unsure what to make of the situation.
Many Chinese are wondering what the episode was really all about: Government payback against the popular American company? Apple's arrogance? Or was it legitimate criticism of Apple's service in China?
CNN also noted that reactions to the original CCTV broadcast were "mixed on social media." While many sided with the government, others thought "state media was overreaching."
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