Beijing: Apple Chief Executive Tim Cook apologised to Chinese consumers on Monday and altered iPhone warranty policies in its No. 2 market after more than two weeks of condemnation in the state-run media of its after-sales service.
From China Central Television to the People's Daily newspaper, government-controlled media outlets bashed the world's largest technology corporation for its "arrogance," protesting among other things that its current one-year service warranty was far shorter than in other markets.
Apple, which initially dismissed those criticisms, on Monday promised to overhaul its consumer practices. Cook has previously said the world's second-largest economy is a crucial market for the iPad-maker.
"We are aware that owing to insufficient external communication, some consider Apple's attitude to be arrogant, inattentive or indifferent to consumer feedback," Cook said in a letter written in Chinese on the company's local website. "We express our sincere apologies for causing consumers any misgivings or misunderstanding."
Cook's apology, unusual though not as rare as during his predecessor Steve Jobs' tenure, highlights the importance of the market for Apple.
The country is typically the brightest spot in Apple's quarterly financial statements. Revenue from Greater China - which includes Taiwan and Hong Kong - totaled $7.3 billion in its fiscal first quarter, up 60 per cent from a year ago.
Apple will begin detailing quarterly sales results from the region starting this month.
Cook said in the lengthy letter that Apple has "much to learn about operating and communicating in China."
China has long been a prime market for Western corporations hoping to capitalize on its growing economic power and increasingly affluent middle-class. Still, companies face many pitfalls operating in the country.
'Much to learn'
Since it joined the World Trade Organization and opened up its markets, many have run afoul of perplexing and sometimes arbitrary local regulations, fickle consumer sentiment - and occasionally capricious media coverage. Regardless, many corporations view the country as prime expansion territory as growth slows in the developed world.
Apple is hardly the first Western brand-name to come under fire in the media for a variety of real or perceived missteps, or the first to alter its policies.
In 2012, CCTV spotlighted McDonald's and Carrefour SA for minor food safety violations. The companies were forced to apologise and their shares slumped as China's army of half a billion microbloggers unleashed their anger online.
Successful foreign brands like Wal-Mart Stores and Gucci have also come under fire for various product and labor issues. More recently, KFC parent Yum Inc issued a mea culpa in January for its handling of reports that chicken from some of its suppliers contained excess amounts of drugs and hormones. It subsequently outlined how it would improve food safety and quality control.
The targeting of Apple may be part of a policy that China has adopted to favour homegrown companies, said Robert Atkinson, president of the Information Technology and Information Foundation.
"This does seem to be part of a growing strategy by the Chinese government to criticize and single out for unfair treatment leading foreign companies in China," he said.
And it is happening as the US government calls out China "on their egregious economic and trade practices, including cyber attacks," he added.
Apple has been expanding in presence in China slowly but steadily, especially through increasing its retail footprint. Its iPhones, iPods and computers are considered aspirational products in China with cache among the countries growing middle class.
Criticism of Apple began on March 15 with the broadcast of an annual show on CCTV about consumer safety and rights, which has become an annual ritual targeting foreign, along with Chinese consumer firms.
The program assailed Apple for its after-sales service, including Apple's failure to offer new replacement iPhones with a one-year warranty in the case of major repairs.
Now, Apple will offer full replacements of iPhone 4 and 4S instead of major repairs, adding a one-year warranty starting from the date of replacement.
It will provide simpler and clearer explanations of warranties on its website and allow customers to offer feedback directly, Cook said. The company will also provide refresher training to service providers to explain the new warranty policy, he added.
The iPhone 5, the latest model, already carries a similar warranty to the new iPhone 4 and 4S coverage.
CCTV's show this year became the subject of online ridicule over claims the network paid celebrities to post micro-blog comments against Apple. Thousands of Chinese have come to its defence online, criticising Chinese firms as being the ones that lack transparency and consumer trust.
English translation of Apple CEO Tim Cook's apology message to Chinese consumers
(This is an automatic translation via Google Translate and therefore some portions may be inaccurate)
To our Chinese consumers:
In the past two weeks, we have received a lot of feedback about Apple in China repair and warranty policy. We are not only a profound reflection on these views, together with relevant departments to carefully study the "Three Guarantees", and also look at our maintenance policy communication and combing our management specifications of Apple Authorized Service Provider. We are aware that, due to the lack of external communication in this process and lead to the speculation that Apple arrogance, do not care or do not attach importance to consumer feedback. We express our sincere apologies for any concerns or misunderstandings this gives consumers.
In order to further improve the level of service, we are implementing the following four major adjustment:
Improved iPhone 4 and iPhone 4S repair policy
Provide a concise and clear on the website of the official Apple repair and warranty policy statement
Increase the intensity of the supervision and training of Apple Authorized Service Provider
Related issues to ensure that consumers can easily contact Apple Feedback Service
At the same time, we also realize that operating in China, and communicate much we need to learn the place. Here, we assure you, Apple for the commitment and enthusiasm indistinguishable from other countries. Bring the best user experience for consumers and satisfactory service is our ideals, our commitment, and it has been deeply rooted in Apple's corporate culture. We will make unremitting efforts to achieve this goal.
iPhone 4 and iPhone 4S repair policy improvements are as follows:
So far, iPhone 4 and iPhone 4S repair this in one of three ways: as from the purchase date of 15 days found the problem, we will be entitled to a refund or replacement for consumers recalculated 1 year warranty period iPhone; 15 days after discovery problem, Apple will replace the part depending, such as camera modules or batteries; replacement parts also can not quickly repaired the iPhone, Apple will provide consumers with a part reassembled new parts, retaining only the consumers existing iPhone 4 or iPhone 4S back cover.
Nearly 90% of customers expressed satisfaction with our repair services, and consumer satisfaction is the most important criterion for Apple to measure its own success.
But others suggested that part of the re-assembly of repair almost replace the machine, so the direct replacement of a device will be more beneficial to consumers. Therefore, since April 2013, Apple iPhone 4 and iPhone 4S service pack upgrade for all 1-year warranty on new equipment replacement parts and replacement date recalculated.
Consumer iPhone 4 or iPhone 4S Apple or an Apple Authorized Service Provider has been part of the re-assembly kit maintenance, we will replace them as whole and for maintenance after the iPhone recalculated from the date of repair year warranty. Apple's warranty system has been updated for the information and, therefore, affected consumers do not need to take any additional action.
Now, all consumers can see on our site clear and comprehensive maintenance and warranty policy terms and conditions.
We are pleased to provide consumers with information who wish to learn more about the after-sales service. For example, we have been to provide 2 year warranty for the MacBook Air and Mac computer motherboards and other major components. Likewise, the the iPad main components has been entitled to a 2-year warranty period, and other components for 1 year warranty.
We realize that our site before this is not clearly stated policy. Hope the following will answer all the questions about Apple provides services.
Apple is to make greater efforts to ensure that Apple Authorized Service Provider to follow our policies, and make every effort to provide consumers with the highest quality service.
Week since March 18, 2013, we made a new training materials for all Apple Authorized Service Provider to ensure that each staff provide services for Apple products is not only familiar with our policies, but also to grasp three guarantees "provisions and related policies. The same time, we have taken the initiative through face-to-face meetings and other forms of verification and to ensure that each Apple Authorized Service Provider have opened training courses to update the knowledge of the staff for the maintenance and warranty policies. We will make unremitting efforts and continuous monitoring of the performance of the Apple Authorized Service Provider to ensure that consumers can get the highest quality service.
Now, the feedback service-related issues is also very convenient.
As the consumers of the services provided by any Apple Store retail store or an Apple authorized service provider doubt, to Welcome www.apple.com.cn/support/service/feedback/ directly get in touch with us. Our goal is to consumers where to buy Apple products or receive services, users can enjoy world-class experience.
Heartfelt thank you to give us valuable feedback, we always harbour immense respect to China, the Chinese consumer is always the top priority of our hearts.
Tim Cook
Apple CEO
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