CELLPHONES: iPhone Leads China List of Data Hogs

Bottom line: The iPhone’s appearance at the top of a Chinese investigative list of “data hogs” reflects the company’s obsession with control, but is unlikely to have a long-term negative effect on its local image.

iPhones gobble up data

Chinese media are once again feasting on leading smartphone maker Apple (Nasdaq: AAPL), which has has come out squarely on top of a “list of shame” that details how some of the best selling brands quietly steal data minutes from their unaware users. I’m not an iPhone user so I can’t attest to how the iPhones steal their data and how easy it is for users to stop the process. But my Google (Nasdaq: GOOG) Nexus phone is guilty of similar data hogging, and I had to pay a couple of large phone bills after I first bought it before I finally learned how to stop such automatic data consumption.

It’s unclear if this latest assault will tarnish Apple’s reputation in China. The company was a favorite target for negative reports by Chinese media in the past, partly due to its high profile that makes any big brand vulnerable to extra scrutiny. But in Apple’s case, the company also came under fire due to its culture of secrecy, a factor that led the influential People’s Daily to label the company as extremely arrogant in a high-profile attack 2 years ago.

Much has changed since then, most notably a major public relations campaign that has seen Apple CEO Tim Cook travel to China at least twice a year to smooth out relations with Beijing. The company also unveiled several green initiatives earlier this year, in moves  that should please Beijing by providing publicity for its broader campaign to raise awareness on environmental issues. (previous post)

Against that backdrop, this latest assault looks like it could bring some negative publicity over the short term though it’s unlikely to have a long-term effect. Apple isn’t the only company named in the negative reports, which are part of a probe by Shanghai quality inspectors into the automated data-usage habits of major smartphone brands. Such automated data usage usually occurs when pre-installed apps try to update themselves or download new information, sometimes resulting in the consumption of big amounts of data even though the owner is unaware.

Other companies singled out in the report include Korea’s Samsung (Seoul: 005930), Japan’s Sony (Tokyo: 6753) and the faded Nokia (Helsinki: NOK1V), as well as domestic giant Huawei. Models from those 4 brands quietly consumed anywhere from 589 KB to as much as 4 MB in a 120 hour testing period after they were turned on and left in standby mode. (Chinese article)

Data Feasting

But Apple really came out way ahead of the group, with its iPhone chowing down a hefty 80 MB of data during the 120 hour period of standby use. That volume of data alone would cost a user 60 yuan ($10) per month, based on standard usage rates from leading telco China Mobile (HKEx: 941; NYSE: CHL).

The same series of investigations also chastises many of the same smartphone makers for including large numbers of unwanted pre-installed apps, resulting in major use of memory. The 20 models tested contained anywhere from 21 to as many as 71 pre-installed pieces of software, including extras like Tencent (HKEx: 700) WeChat as well as basic programs for things like making calls.

That particular list saw smaller firm Oppo take the prize for putting the 71 pre-installed programs in one of its phone models. Among those, 47 of the programs and apps couldn’t be uninstalled, meaning such software was probably hogging a big portion of the phone’s memory.

As a smartphone owner, I actually do find information like this useful, and also reflective of a company’s culture. Even though I don’t use iPhones, I do get the sense that Apple is very much obsessed with controlling its handsets even after users buy them. That would explain why it compulsively instructs the iPhones to download so much data.

This obsession with control is quite different from the arrogance that caused so much friction with Beijing 2 years ago. In this case, central Chinese leaders are equally obsessed with control, and thus are unlikely to criticize Apple for that element of its personality. Instead, this latest case looks more like a localized consumer protection effort that is getting some play in the media, and could even prompt some companies to clarify or change their ways. But it’s unlikely to have a prolonged negative effect on the images of any of the companies, including Apple.


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