This time it’s China attacking Apple, the very hand that feeds the economic revolution in the world’s most populous nation. What’s going on? It’s all about control. Apple wants to control its destiny and China wants to control Apple.
The Panda That Bites
One major reason for Apple’s success in the 21st century is China, the land of overnight manufacturing, and the potential for a billion new Apple customers.
Apple has used China to build iPhones and iPads for many years. Low wages and rare earth metals give Apple high quality products with high margins.
So, what’s going on? China’s Communist Party mouthpiece, the People’s Daily, and other media outlets, have been attacking Apple over warranty issues, even singling out the company for unparalleled arrogance.
More recently, China National Radio publicized a notice from China’s State Administration for Industry and Commerce that encouraged authorities to protect consumer’s rights.
Why? Apparently Chinese authorities and media think Apple’s warranty tactics in China are less consumer oriented in other countries. Apple denies the charge, of course.
These attacks by Chinese media and officials against Apple are unprecedented. Apple needs China probably more than China needs Apple.
Remember the Cook Doctrine from 2009?
We believe that we’re on the face of the Earth to make great products, and that’s not changing. We’re constantly focusing on innovating. We believe in the simple, not the complex.
We believe that we need to own and control the primary technologies behind the products we make, and participate only in markets where we can make a significant contribution.
We believe in saying no to thousands of projects so that we can really focus on the few that are truly important and meaningful to us.
We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot.
And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change.
And I think, regardless of who is in what job, those values are so embedded in this company that Apple will do extremely well.
The section of the Cook Doctrine that caught my eye was the one about owning and controlling primary technologies behind Apple’s products.
That explains why Apple has their own in-house chip designers, and explains why Samsung is getting dumped as an Apple supplier.
For Apple, their product differentiation requires control. For China’s officials and media, Apple’s higher profile, and the affection given to Apple by millions of Chinese, means control is slipping away, hence the recent attacks.
Speaking of affection, Apple’s customers have used the internet and retaliated against the Chinese government’s heavy handed accusations, and view it as a cruel joke. Why? Their experience with Apple products mirrors that of customers elsewhere in the world.
The government in China is all about controlling the people. Apple is all about controlling the process. Perhaps a clash was inevitable. China doesn’t want outsiders to control technology, hence the government’s backing of open source projects as alternatives.
Interestingly, the Chinese money magazine Caijing asked Weibo readers ‘which arrogant company or companies do you want to smash?,’ hoping to see Apple high on the list, instead got an earful from Chinese who listed state-owned monopolies, telecom providers, oil companies, and major banks. Apple didn’t make the list.
Does Apple have a China problem? Possibly. Detente is in order, but Apple has been known to move to friendlier climates, so don’t be surprised if future products don’t have a Made in China label.