Sorry!! The article you are trying to read is not available now.

Are Chinese Consumers Souring on Apple?

Print comment Post Comments

While Apple "has no rivals in the tablet PC market and at the high end of the mobile phone market," Geng Wenxin of the Global Times wonders today if the tech giant "may be storing up problems for itself by its relative negligence toward Chinese consumers."

"Apple treats Chinese consumers very coldly. Repair or return of products is very difficult and complicated. I just pray the products will never go wrong because I feel the communication process with Apple staff will make me crazy. Using Apple products gives me an ambivalent feeling," iPhone and iPad owner Zhuo Tingting tells Geng. "Apple should give more priority to the China market. It doesn't provide enough technical support, care and communication for Chinese users. It will take a long time for Apple to improve its stubborn and ruthless image in China."

Strange -- just a few months ago, Jonny Evans of Computerworld's Apple Holic blog called China "Apple-crazy," and suggested readers "get set for an Apple revenue revolution in China, as the country goes insane for the company's solutions while COO Tim Cook tours the place to seal the iPhone 5 on China Mobile deal. Where iPhone goes, iPads and Macs follow, and this is the beginnings of a new growth story."

Wrote Evans:

Look at the evidence. Look at the passion. Today we learn one Chinese teenager is so crazy to get an iPhone 4 she was caught trying to sell her virginity on Weibo. A few weeks ago, one Chinese teenage boy sold his kidney in exchange for an iPad.

Don't misunderstand me. I'm not representing those events as good news, just as illustrative of the passionate intensity with which Chinese consumers regard Apple products.

China already accounts for around 10 percent of Apple's revenues, and this is growing insanely fast. Two years ago Apple generated just $1 billion business in China.

Speaking during Apple's Q2 financial call, Cook said: "Greater China saw iPhone sales being up over 3x, about 200 -- almost 250%. And this catapulted revenue for the first half or first fiscal half in Greater China to just under $5 billion, which is up almost 4x year-over-year."

But to reap China's rewards, companies must adapt to the highly specific demands of China's market. In June, Renee Montagne of NPR's Morning Edition spoke with James McGregor of consulting shop APCO Worldwide (and author of the book "One Billion Customers: Lessons from the Front Lines of Doing Business in China") about achieving success in the world's second-largest consumer market:

MONTAGNE: Besides regulations, how much do cultural differences play in determining the fate of any given business venture in China?

Mr. MCGREGOR: Well, sometimes it's hard for the big American companies, because they have developed themselves in the continental-sized economy of the U.S., and they've gotten very good at what they do, but they are very U.S.-centric in the way they do things and the way they think.

You have to realize you're in China, and you have to realize you've got to do some things differently. And these companies that come in here and say this is how we do it anywhere in the world and this is how we're going to do it in China have their heads handed to them before they learn the lesson. And for most of the big multinationals, they really have learned those lessons. They came in in the mid-'90s with way too much money and ambition, and they all got - had very difficult times, and they've since localized, learned how to train Chinese management.

Of course, there are some folks who couldn't be happier with Apple's in-country customer service.

From M.I.C. Gadget:

The Apple Store in Shanghai is just like any Apple retail stores around the world, allowing customers to try the Apple products any way they like. Of course, you can try an iPhone in the store, and make calls with it. The Shanghai Apple Store allows customers to make any calls, including international calls, and there’s no time limit. So, there are some “smart” Chinese often visit the store, picking up the demo iPhones, and start making calls. Some of them even bring along a list of phone numbers.

So, if your iPhone breaks, use theirs. Talk as long as you like.
POSITION:  No positions in stocks mentioned.