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After Apple, China Directs Its Ire at Microsoft


Yum Brands, Intel, and Sony also make the news.

China Watch: Top Business News From the World's Second Largest Economy

Last month, China's state media slammed Apple (NASDAQ:AAPL) for its poor local customer service policies. The criticism eventually compelled CEO Tim Cook to issue a public apology to the company's Chinese customers and to pledge to improve its service standards.

It appears this week that after successfully extracting an apology from Apple, the Chinese media has set its sights on another tech giant: Microsoft (NASDAQ:MSFT).

(See also: Was It Necessary for Apple to Kowtow to China?)

The state-owned China National Radio admonished Microsoft's after-sales service for its Surface tablet, saying that the warranty period for the Surface Pro is shorter than what is called for under China's laws.

According to Bloomberg, China National Radio denied any link between its Microsoft critique and the previous stories about Apple. The station said that it started investigating Microsoft's after-sales policies only after receiving complaints from listeners.

(See also: Is the Chinese State Media Out to Knock Apple Down?)

Microsoft will be hoping that the situation will not escalate like it did with Apple. It was China Central Television that first denounced Apple's customer service in mid-March, but Chinese newspapers quickly piled on, with the People's Daily publishing over a dozen articles on the subject.

It is therefore likely that we will see more criticism of Microsoft by the Chinese media in the coming weeks. For now, the Redmond, Washington-based company has yet to comment on the issue.

Bird Flu Will Hurt Sales Significantly, Says Yum Brands

It's been a tough start to the year in China for Yum Brands (NYSE:YUM). Sales at Yum's KFC stores in China dropped some 20% in the first two months of 2013 after a chicken supply scare late last year.

And now that a new round of the deadly avian flu has hit China, the company filed a report this week saying that the disease outbreak would have a "significant, negative impact" on KFC sales in April.

"KFC has got off to a very bad start this year, it's had a double whammy of incidents. But increasingly there's also much stiffer competition from local quick service restaurants firms," Frank Gibson, a Shanghai-based independent business consultant, told Reuters.

He continued, "Longer term it will be hard for them to maintain the growth they've experienced in the past, but this will be more due to a more complex and dynamic environment than necessarily due to the issues they faced in the first quarter of this year."

Earlier in the year, Yum lowered its 2013 per-share earnings forecast, citing poor results in China. The company is still continuing with its expansion plans in China. It is expected to open some 700 new restaurants in the mainland this year.
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