Why did Apple apologize to China?
For the second time in his brief tenure as the head of Apple, Tim Cook has apologized to customers. His latest mea culpa was offered to Chinese consumers after the company was "lambasted by state-run media for arrogance and poor customer service," reports Bloomberg.
The apology stems from an odd controversy: Apple's failure to replace the back covers of iPhones with new ones after making interior repairs. The company was subsequently blasted for two weeks straight by China Central Television, which reaches more than 1 billion people every day, and in dozens of articles published by The People's Daily newspaper.
Why was Apple so quick to issue an apology? The short answer, says John Paczkowski at AllThingsD, is that the "company's sales in China hit $22.5 billion in fiscal 2012. That's more than double what they were in 2011, and it represents about 15 percent of Apple’s total revenue for the year."
In other words, China is not just a top priority in Apple’s global expansion. It is the top priority. That being the case, any altercation with the Chinese government — whether its origins be real, imagined, or manufactured — is decidedly unwise, and almost certainly not good for business.[AllThingsD]
As a result, Tim Cook says that Apple will improve iPhone repair policies and make communications clearer. Furthermore, existing customers will be granted a new 1-year warranty to get replacement parts for the iPhone 4 and iPhone 4S. In a statement issued in Chinese, Cook extended Apple's "heartfelt" gratitude for China's "valuable feedback," and said "the Chinese consumer is always the top priority of our hearts."
Apologizing to the Chinese government has become "a right of passage for international companies criticized by China Central Television," says Bloomberg, including Volkswagen, Carrefour Group, and Yum! Brands. "The state media has been picking on foreign companies really too much lately," Shaun Rein, managing director of China Market Research Group in Shanghai, told Bloomberg. Rein says the Chinese government too often turns controversies over customer satisfaction into a "political issue."
As expected, the state-run Chinese media quickly reversed course after Cook's apology. Here's what was written in the tabloid section of The People's Daily shortly after Monday's statements:
[Apple'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. [Reuters]