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Why Apple CEO Tim Cook Apologized to China

Why Apple CEO Tim Cook Apologized to China
By Jennifer LeClaire

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China's People's Daily published a front-page story alleging Apple was discriminating against Chinese consumers. And the General Administration of Quality Supervision, Inspection and Quarantine, which sets standards for products in China, told Apple to change its service practices and follow Chinese laws and regulations.
 



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Double-Edged Sword

Rob Enderle, principal analyst at the Enderle Group, told us Apple and China haven't gotten along well for many years, primarily because of the intellectual property theft in China.

"Long before you could actually get an iPhone in China you could buy all kinds of iPhones in China, but none of them were made by Apple," Enderle said. "They even duplicated an Apple Store in China, which was eventually shut down. Apple has been far more restrictive with its products in China. It's a cross between one of the most proprietary firms and a country that has perhaps the worst record of major countries in terms of intellectual property protection."

That said, Enderle noted, China is one of Apple's growth markets. Because Apple was so slow to enter the market, there was substantial upside and the numbers out of China have been one of the positive reports under Cook's leadership.

"Because there is so much copying going on, there is a lot of brand loyalty for original products," Enderle said. "They are higher quality and carry more status. So even though there may be more Apple clones being sold on the side in China than Apple products, the fact that Chinese folks will actually seek out the Apple products makes it a very lucrative market for Apple regardless of the illegal activity."

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