More Apple bashing from Beijing
The latest assault on Apple by Chinese media is motivated by several factors, including frustration that the company isn't investing more in China.
Beijing's recent campaign to bash iPhone maker Apple (Nasdaq: AAPL) is starting to border on the bizarre, with the official Communist Party newspaper the People's Daily launching the latest assault on the world's biggest tech company.
I've lived in China for quite a while now, and have seen occasional attacks on major foreign names in the official Chinese media, including my own former employer Reuters. But most of those attacks are related to specific incidents, and usually lasted a week or 2 at the most before the issue was quietly retired.
The editorial appears to be tied to another report critical of Apple that ran on March 15 on CCTV, China's biggest broadcaster and also a mouthpiece of the Communist Party. That report ran on China's national consumer day, and attacked Apple for engaging in practices that cheated some customers out of extensions to their warranties after problems occurred with their iPhones.
To be fair, Apple wasn't alone in being targeted for attack by CCTV, which ran a long series of reports criticising a wide range of other domestic and foreign companies for similar deceptive practices.
Against that backdrop, perhaps one could view this latest assault on Apple as the People's Daily's attempt to defend a sister publication following all the controversy. Whatever the reason, the assault certainly doesn't bode very well for Apple, which counts China as one of its top global markets.
In many ways, I don't feel particularly sympathetic to Apple in this case even though I do think this latest attack seems rather unjustified. The "arrogance" that the People's Daily criticises is part of Apple's corporate culture, which sees it rarely grant interviews or provide information to outsiders about its upcoming product plans. But despite that aloofness, Apple is still hugely successful because it does the most important thing that companies should do: making high quality products that people want to buy.
As for the allegations of greed and dishonesty, those also seem a bit unjustified. Making profits is the main objective of any private company, be it Chinese or western. So Apple can hardly be faulted for wanting to earn as much money as it can from the Chinese or any other market. As to dishonesty, every company of that size probably engages in such "dishonest" practices of some sort, not deliberately but because it's inevitable that in such a large company some employees somewhere will do something that deviates from official policy.
So the bigger questions become: What is motivating these attacks, how long are they like to last, and what are the bigger implications for Apple in China? In answer to the first question, the latest attacks seem to be motivated at least partly by the CCTV controversy, as well as Beijing's general dissatisfaction that Apple isn't investing enough in China in tandem with its rapid sales growth.
Apple could help to improve its image if and when it does finalise any plans for an R&D centre in China, as it never formally announced anything after the original media reports. Setting up such a centre would be a hugely prestigious gain for China, and might help to quiet some of the company's critics. In the meantime, I expect this current round of criticism will probably end soon, with perhaps 1 or 2 more negative editorials in the People's Daily or other major publications.
Meantime, the sentiment that sparked the editorials is likely to remain until Apple shows more good will toward China with actions like a new R&D centre or other investments. Accordingly, Apple should look for more ways to invest in China, and equally important, it needs to abandon its culture of secrecy by publicizing those efforts. If it fails to modify its game plan, it stands the very real prospect of facing repeated assaults in the official Chinese media, which will hurt its image, its reputation and ultimately its sales in China.
Bottom line: The latest assault on Apple by Chinese media is motivated by several factors, including frustration that the company isn't investing more in China.
To read more commentaries from Doug Young, visit youngchinabiz.com