Apple's apology to customers reflects importance of China market

Analysts doubt warranty row, for which Apple has apologised, will affect sales on mainland

PUBLISHED : Wednesday, 03 April, 2013, 12:00am
UPDATED : Wednesday, 03 April, 2013, 10:07am

Apple's apology to its customers on the mainland highlights the importance of the market to the tech giant, industry analysts said.

They said although chief executive Tim Cook's open letter took some time coming, it should hurt neither the computer maker's brand image nor its sales.

Two weeks after CCTV, the national television station, criticised Apple's after-sales service, followed by other state-controlled media, the US firm posted an apology on its website on Monday and said it would double the warranty for Chinese consumers to two years, which is what mainland law requires.

Beijing-based independent industry commentator Xiang Ligang said the warranty extension would not drive up iPad and iPhone prices on the mainland because Apple faces intense competition.

"In the past it had no rivals, but now its competitors are just one step behind," he said.

On Sina Weibo and other online platforms, popular opinion contrasts with that of the state media. "Apple has changed my iPhone free of charge three times, and I'm satisfied with their service," one user said.

The firm's website shows Apple provides only a one-year warranty for its iPad in the United States and Japan.

Xiang said mainland law requires a two-year warranty for products such as the iPad. He said what consumers usually don't know is that Apple replaces their phones not with new handsets but with refurbished ones.

"There is nothing wrong with the practice, but Apple should inform consumers, which it doesn't," Xiang said.

"China is a very important market for Apple," Xiang said. "The apology shows Apple has decided to protect its market interest rather than getting into a fight with Chinese media."

China is Apple's second-biggest and fastest-growing market, with sales of US$6.8 billion in the December quarter, 12.5 per cent of its total sales.

Huang Meng, an analyst at the research firm Analysts International, said he expected Apple to bear the cost of extending the warranty period.

"I don't think the sales of Apple products will be affected," he said.

Mainland newspapers have changed their tune since Apple issued its apology.

"The company'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," said Global Times, a tabloid published by People's Daily, the Communist Party's mouthpiece.

Last week, People's Daily criticised Apple for being "dishonest, greedy and arrogant".