Apple apologies to Chinese consumers: clues to understand the soap opera

If there is one thing for foreign companies to learn in China is that you don’t want to mess with consumers… nor the government. Apple’s setback in the Middle Kingdom, its second-biggest market after the United States, has been lasting for months. First they had to deal with the scandal of working conditions at its technology manufacturer Foxconn factories. Now, it’s their warranty policies. The company gave only a one-year warranty, while in China the law is two years.

Those allegedly illegal warranty policies were examined in a report broadcasted on March 15, Consumers Day, by China’s Central Television CCTV. Several hours later, Weibo (the Chinese Twitter) was bustling with harsh comments against Tim Cook’s firm. Right after the Chinese propaganda media joined in. In its editorial, the People’s Daily spoke about “Apple’s Incomparable Arrogance”.

Note that this is not the first time the Chinese state-run media give a huge coverage of a campaign against a foreign company. Remember when French retail group Carrefour suffered a boycott back in 2008 following the Olympic torch’s troubled passage through Paris? It also made big headlines in the official mouthpieces of the Communist Party.

Interestingly, this Apple criticism coincides with the Obama administration’s pressure on Beijing on cybersecurity issues. Besides, Chinese telecommunications giants Huawei and ZTE have been banned from doing business in the US because of concerns that they could spy. Is Apple suffering Beijing’s retaliation?

Anyway, Tim Cook doesn’t want to take the chances. Apple’s revenue in China reached $20 billion in 2012. In its most recently reported quarter, sales were about 13 percent of the company’s total sales, up from 9 percent a year earlier. That is why he has addressed a letter to Chinese consumers:

“We are aware that a lack of communication during this process has led to the perception that Apple is arrogant and doesn’t care or attach enough importance to consumer feedback. We express our sincere apologies for any concerns or misunderstandings this gave consumers,” Mr Cook says.

But more importantly, he uses a humble, public-apology tone, highly appreciated in Chinese culture, which “gives face” to Beijing:

“We also realize that we still have a lot to learn on operating and communicating in China. We hereby assure you that the commitment and enthusiasm for China from Apple is not different than any other country.”

Shall we call it a victory for Chinese government warning American companies doing business in its territory? Or may be a smart foreign company adapting to where its business is growing the fastest?