An increasingly assertive CCTV has turned its spotlight on some of world’s biggest brands as part of its annual consumer rights program, saving its biggest ammunition for the world’s easiest target: electronics giant Apple (Nasdaq: AAPL). I have to admit that I’m not particularly sympathetic to the highly secretive Apple, which appeals to Chinese consumers by catering to their fondness for famous brands with a certain snob appeal. But at the same time, I do have to say that Apple seems to come under an unusually high degree of scrutiny in China, and most often makes headlines for just about any negative news associated with the company and its partners.
Let’s take a look at the latest Apple-bashing headlines that began with a report on China Central Television (CCTV) last week as part of a broader series of exposes to mark Consumer Rights Day on March 15. Most newspapers and other major media happily followed CCTV’s lead, repeating the findings of the CCTV report to make sure anyone who reads a newspaper, watches TV or surfs the Internet got the news.
CCTV’s biggest finding was that many consumers who asked for replacement iPhones due to quality defects found the new phones they received still contained the former back panels from their old phones. (English article) The CCTV report quoted an Apple store worker saying the inclusion of old back panels allowed the company to classify those replacement phones as used rather than new. By classifying them as used, Apple wasn’t obliged to extend its warranty on the phones for another year.
I had to read the articles 2 or 3 times before I could finally understand the logic, although it does appear that some of the Apple repair outlets were indeed trying to shirk their warranty responsibilities with this particular tactic. But I did find this particular “defect” in Apple’s service policy relatively minor, and suspect it affects only a very small number of people.
By comparison, some of the other issues CCTV uncovered as part of its bigger Consumer Rights Day series of investigations seemed a bit more serious. One of those was a potentially serious defect in gear boxes on some Volkswagen (Frankfurt: VOWG) cars, which one consumer described as a “time bomb”. Other companies that came under fire included Internet firm NetEase (Nasdaq: NTES) for privacy violations, and domestic car maker Jianghuai for using cheaper regular steel instead of galvanized steel in one of its models.
I should commend CCTV for being relatively balanced in its selection of both western and domestic brands for its Consumer Day investigative reporting. But at the same time, it’s clear from the huge focus on Apple that CCTV reporters were under big pressure to find something negative to say about the US tech giant. As a former journalist, I know the pressure from editors at some media can often be huge to uncover “dirt” on major companies like Apple.
But those same editor是 are often also reasonable about putting things in perspective when the targets they choose are relatively clean. In this case, the attack on Apple seems a bit gratuitous, as the offense seems relatively minor and probably affected only a very small number of people. The Volkswagen offense seemed a bit more serious, but didn’t seem to get as much ink as Apple, and the violations by domestic companies were mentioned almost as an afterthought in the reports I read.
At the end of the day, big multinationals like Apple and McDonalds (NYSE: MCD) should expect this kind of treatment not only in China but also in most major markets, since their big names automatically attract more attention and negative news involving them can help to sell more newspapers. I expect that Apple probably won’t suffer too much long-term damage in China from this particular report. But the cumulative effect of this kind of negative reporting will inevitably tarnish the company’s reputation in China over time, ultimately hurting its sales.
Bottom line: CCTV’s latest report on a flaw in Apple’s China repair policy is the latest example of an overblown media attack on a major foreign company operating in China.
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