Finally, a Worthwhile “Apple: What Have We Learned?” Article

April 5, 2013

You’ve probably read more than one story about Apple’s current troubles in China. This latest kerfuffle involves a broadside against Apple’s warranty and repair policies by local media (e.g., CCTV, People’s Daily) and at least one consumer agency.

Why have I avoided it? While it’s big news for Apple, and for all you Cult of Mac folks out there (oh yeah, and journalists/pundits), I can’t find anything here that can really be put in the “new” category. In other words, all we’ve got is another huge multinational that is being singled out by the government here.

Been there, done that. Does this signal some sort of new policy stance by Beijing? I have no idea (and no one else does either). Is this evidence of protectionism or revenge for the hits taken by Huawei and/or ZTE? Maybe, but once again, no one knows for sure. I didn’t much feel like speculating, since I probably have even less information than most pundits out there.

All that being said, I break my much-appreciated silence (I assume) on this issue not to weigh in, but to simply point you towards one of the only articles written so far that I find useful, David Wolf’s “Kowtow Now” in Foreign Policy. And I’m not giving a thumbs up to this because of any groundbreaking news or opinion; in fact, it is totally well-tread ground (if you’ve been paying attention to China for the past decade or so). However, it’s a very well-written piece and I agree with it wholeheartedly.

What I like is that the article does not focus on Apple so much, but rather takes a broader look at how foreign companies are treated in China. This is useful stuff, and if I may say so, David’s conclusion is something I’ve been repeating for many years:

The better course of action for companies is to try to avoid becoming a target. Take the double standard and use it as an advantage by proactively behaving at a higher benchmark: when in Rome, doing as the Christians, as it were. Making China a “most favored nation” by adhering in China to your highest operating standards from around the world — in finance, customer service, hiring, and ethics — is not just a nice idea, it is a corporate survival strategy.

Excellent advice. If you want to waste your time speculating about Apple and what the government might be doing, go right ahead and troll through the usual news coverage. But if you’d rather learn something useful, go read David’s article.

2 thoughts on “Finally, a Worthwhile “Apple: What Have We Learned?” Article

  1. Joyce Lau

    This was an interesting story for those of us who follow Chinese media and its wacky ways. But as a business story, it’s a non-story, like you said.

    Chinese consumers (like all consumers) vote with their wallets. The Chinese love Apple products so much, they’re willing to line up overnight for them. No People’s Daily article is going to change that. Nobody chooses a phone or computer out of patriotism.

    I remember one staged “anti-Apple” protest in Hong Kong. These allegedly angry people went to the main store here. Then they looked at the devices they were using to take photos of this alleged outpouring of anti-foreigner sentiment… and realized that most of them were iPhones.

    I’ve always said that China presumes (incorrectly) that other nations think in the “Chinese way.” This is why outlets like CCTV and People’s Daily try to generate false outrage over something really small, like getting the back panel of your iPhone fixed.

    The Chinese government is obsessed with face and bristles at mockery or criticism. But Americans don’t operate that way. Apple is from a nation of late-night comedians and snarky tech bloggers. It’s used to mockery and criticism. What does Apple care if one Taiwanese entertainer writes one negative sentence about its repair policy?

    Apple is secure enough to not care about face, or whether “Chinese celebrity criticism” was manufactured. By apologizing right away, they treated it like a giant brushing a fly off its shoulder.

    The did the right thing. They gave the government the kowtow they so desperately wanted. By coming right out with promises of improvement, they made themselves look far more respectable than the Chinese media / state / business cabal, which came out looking petty, bitter and out-dated. They did not feed the trolls, so to speak.

    And they did so knowing that NONE of this has an impact on what they really care about — selling their stuff. If anything, it probably helped them in Chinese consumers’ eyes.

    You’re right that other foreign companies should take note.

    As for China — they’d be better off redirecting their energies to their own product development and marketing.

  2. Tim

    Wolf is dead on when he suggests that foreign companies have to play on a different level than local companies- this is often part of the ‘China Price’ of operating in this country. For the vast majority of foreign invested companies here, they will need to follow the laws and compliance standards that their competitors routinely ignore. But his argument about operating at a higher benchmark misses a level of nuance: it should not mean that foreign-invested companies should treat consumers in China the same as consumers in a developed country. The Vera Wang mini-scandal is a perfect example of this: how do you actively protect your brand (and the consumers who are paying for an original) in a country rampant with counterfeit and shanzhai goods? The answer is not looking at your SOP in other countries.

    There is an ongoing list of failed foreign brands in this country that media-friendly consultants like to use as parables of how paramount adaptation is to the local market. What many tend to neglect is that this can often conflict with being held to a higher standard – in particular in industries where the margins simply do not allow different playing fields.

    On the whole, holding foreign-invested companies to a higher standard does little to encourage locally-invested companies to change how they operate. Greater competition will do this instead.