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Why Apple CEO Tim Cook Apologized to China

Why Apple CEO Tim Cook Apologized to China
April 1, 2013 1:58PM

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China's People's Daily published a front-page story alleging Apple was discriminating against Chinese consumers. And the General Administration of Quality Supervision, Inspection and Quarantine, which sets standards for products in China, told Apple to change its service practices and follow Chinese laws and regulations.

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It's not the first time Apple CEO Tim Cook has had to apologize, but it's the first time he's had to write an apology to Chinese consumers. Cook is sorry for the misunderstandings around its customer service warranty programs in the Far East and has vowed to make changes to the policies for its iPhone 4 and iPhone 4S.

Apple has been in the hot seat for weeks. The state-controlled media have unleashed a barrage of criticism against Apple's warranties, accusing the iPhone maker of treating China unfavorably compared with other nations. Apple at first denied there was any difference in its China warranty policies and those in other regions.

"We are aware that a lack of communications...led to the perception that Apple is arrogant and doesn't care or attach enough importance to consumer feedback," Cook said in a Wall Street Journal translation of the letter. The original letter is written in Chinese and published on Apple's China Web site. "We express our sincere apologies for any concerns or misunderstandings this gave consumers."

Apple Backpedals

Apple is promising to offer Chinese consumers more clarity of its warranty and repair policy on its China Web site, as well as to improve training for Apple store associates there. Apple has also pledged to offer new replacement devices for users under its one-year warranty. Apple previously only replaced non-working parts. Cook took the opportunity to note that 90 percent of consumers were satisfied with the original return policy.

Why, then, was Cook so quick to apologize? A couple of reasons. First, Apple's sales to China in 2012 rose to $23.8 billion, from $10 billion in 2011. That's more than double the sales in just a year and 15 percent of Apple's revenue base. Some market research firms also position China as the largest smartphone market. Samsung and Apple are in heated competition there, just like in other nations.

But there's also the media pressure. China's People's Daily published a front-page story alleging Apple is discriminating against Chinese consumers. And the General Administration of Quality Supervision, Inspection and Quarantine, which sets standards for products in China, told Apple to change its service practices and follow Chinese laws and regulations, according to Forbes.

"It was responding to complaints from consumers who said Apple provides only one-year warranties on the mainboards of its MacBook Air computers sold in China. Chinese rules require manufacturers to provide a two-year warranty on a computer's major components," the China Daily reported. (continued...)

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