Are Apple’s Struggles in China Just Beginning?
Apple (NASDAQ:AAPL) may be surviving the negative attention that Chinese state-run media has been laying on the company, but government criticism indicates that a bigger problem — one that Apple can’t avoid — may be on its way.
Recently, Apple has been slammed by China Central Television as well as the People’s Daily — the Communist Party’s main voice in the media. The media outlets criticized Apple for having poor and discriminatory service practices when it came to Chinese customers.
One of the campaigns against Apple aired on CCTV and was quickly followed by activity on Taiwanese-American actor Peter Ho’s Sina Weibo account — a social media service similar to Twitter — and that quickly became the focus of the matter, as Ho later denied having posted the comments, thus discrediting his purported slam against Apple. Chinese fans of Apple then took to the web to criticize the attack on Apple.
Consumers have complained that Apple may not be the one that’s in the wrong, arguing that domestic companies should be facing the criticism instead. Their claims were supported by references to the incident where thousands of dead pigs were found in a river that supplies Shanghai with drinking water and the discovery that a supply of milk powder was contaminated with the chemical melamine …
Having the support of consumers within China may help Apple fair the foul weather a bit better, but it still will have to contend with the government, which may be playing domestic favoritism. Last year, Apple drew 13 percent of its total sales from China, and its operations in the country saw sales grow 67 percent to $6.63 billion — a much bigger increase than the company’s overall growth of 18 percent.
If the Chinese government works against Apple, it could fall behind in the market that’s currently led by Samsung and 2 Chinese brands. Government appeasement will be important move to ensure it can get its products to Chinese consumers as fast and fluidly as other companies, otherwise Apple risks falling behind in the biggest and one of the faster growing smartphone market in the world.