Telecom Lead Asia: Tim Cook, CEO of smartphone and tablet major Apple, has issued an apology to Chinese consumers after government media attacked its repair policies.
A statement Apple posted in Chinese on its website said the complaints had prompted deep reflection and persuaded the company of the need to revamp its repair policies, boost communication with Chinese consumers and strengthen oversight of authorized resellers.
Apology from Tim Cook reflects the device major’s dwindling market share in China.
In a December 2012 note IDC said Apple’s rank in China’s smartphone market fell to No.6 in the third quarter of last year as it faced tough competition from Chinese brands. Apple’s market share by shipments was under 10 percent in the third quarter, when China’s smartphone shipments hit a record high, at more than 60 million units.
IDC also recently projected that Apple will lose share in the tablet market from now through 2016. Apple’s share of the tablet market, IDC projects, will fall to 49.7% in 2016 from 56.3% in 2011 and from a projected 53.8% in 2012.
Last week, China Central Television criticized the company’s after-sales iPhone customer service in China and described how Chinese consumers were forced to pay $75 to replace faulty back covers, though such a replacement comes at no cost in many other countries.
In addition, People’s Daily, which ran an editorial last Wednesday headlined “Strike down Apple’s incomparable arrogance”, had accused Apple of arrogance, greed and throwing its weight around and portrayed it as just the latest Western company to exploit the Chinese consumer.
“We’ve come to understand through this process that because of our poor communication, some have come to feel that Apple’s attitude is arrogant and that we don’t care about or value feedback from the consumer,” Cook’s Chinese statement said. “For the concerns and misunderstandings passed on to the consumer, we express our sincere apologies.”
iPhone 5 sales did not help Apple improve sales in China. Its market share increased to 8.5 percent in China in the fourth quarter of 2012, up 0.5 percent from the previous quarter.
Sales of Apple products in the region, which includes Taiwan and Hong Kong, grew 67 percent to $6.8 billion in the first three months of 2013, compared with the same period a year earlier, Reuters reported.
The region is Apple’s third largest market, accounting for 13 percent of all sales last year. In January, Cook said he expects China to replace North America as its largest source of revenue in the foreseeable future.
For Nokia as well, China is the #1 telecom market.
But Apple’s main competition in China is from Lenovo, Huawei and ZTE.
Huawei, the top three smartphone vendor in the world, is bringing innovative phones — the world’s thinnest (6.68 mm) smartphone and smartphone with a 6.1-inch display — to gain market share.
ZTE maintained its top 5 position primarily to an uptick in lower-cost smartphone sales in many emerging markets. IDC says the company has traditionally relied on sales of phones to China, where the company is based. Notable progress has been made in developed markets too.
Arvind Krishna
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