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Rachel Lu

Chinese State Television Goes After Apple Inc: Web Users Call for Boycott

A view of the Apple Store in Shanghai. (Via Bigstockphoto)

[Update: Tea Leaf Nation subsequently reported that some Weibo users are accusing others of having been paid to criticize Apple Inc. You can read more here.]

Will Apple’s share price take another pounding?

March 15 — the Ides of March — is a day that strikes fear into the hearts of many of China’s corporate bosses. On this day of each year since 1991, China Central Television (CCTV), the state-owned behemoth, runs a live consumer protection show, sometimes known simply as 3.15, that exposes defective products, shady scams, and subpar services from well-known brands.

The show is watched by hundreds of millions of people all over China. An exposé can be devastating to companies doing business in China, and its effect can linger for years.

And this year, CCTV has the juicy Apple Inc. in its crosshairs.

In the lead segment, CCTV accuses Apple of shortchanging Chinese consumers. The program reveals that when consumers bring in iPhones for repair, Apple offers to replace the phone instead of repairing specific parts. However, the replacement phone is not new, just a refurbished one with the old backcover. This practice does not exist in the U.S. and Europe, claims CCTV, and thus is discriminatory against Chinese consumers.

Screenshots of CCTV’s segment targeting Apple (via Weibo)

The reason for retaining the back cover is to evade Chinese regulations on warranty periods, CCTV goes on to claim. Apple does not restart the clock on the warranty period to cover replacement phones because they are not new (hence the refusal to replace back covers). After they receive refurbished iPhones, Chinese consumers only enjoy the warranty periods left on their original iPhones.

CCTV quotes a Mr. Bi, who allegedly had a year-long dispute with Apple on this issue: “The first thing they say is that we will not change. The second thing is that it’s because we are Apple.”

On Sina Weibo, China’s Twitter, many consumers expressed their outrage at Apple’s alleged discrimination, and some called for a boycott of Apple products. User @张唯Vivian wrote, “Why does Apple treat Chinese consumers like this? What a bully, looking down on Chinese people!” @泰俊伟 wrote, “Why can’t our country stand firmer against these kinds of products? At least we should have treatment equal [to consumers in other countries], otherwise remove them from our shelves!”

Others shared their complaints about Apple products. @sally9805 complained, “Ever since I started using Apple I realized its phones are shoddy. The Home key and the Lock key break all the time. Less than a year in my case. Their after-sales services are really bad too.”

The nationalist sentiment and collective ire are bad news for Apple. Its sales in the Greater China region totalled more than US$6.8 billion in 2012, up from more than $4 billion a year ago. However, its market share sunk far below that of Samsung and Lenovo.

3.15, however, is not without its own detractors. Astute observers have pointed out a more sinister purpose than protecting consumers and encouraging upstanding business practices. Taking out expensive advertisement on CCTV is a good way to ensure that a corporation’s name is not included in 3.15′s annual black list. Refusing calls from CCTV’s marketing department, on the other hand, may not a smart idea.

The next move appears to be Apple’s. If CCTV’s marketing department is indeed playing hardball and Apple flinches, Chinese consumers could soon see a wave of Apple advertisement on state television. Alternatively, Apple could stand firm against the accusations. That would risk further backlash, but Apple may calculate that the PR setback and concomitant online venting are more smoke than fire.

Apple would do well to tread carefully. Chinese consumer fashions change fast, and the company’s profit margins in China are already declining. If Chinese consumers feel rightly or wrongly that they have been discriminated against, the March ides may prove to be the day the tide finally turned.

 This article also appears on The Atlantic, a Tea Leaf Nation partner site.

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Rachel Lu

Rachel Lu is a co-founder of Tea Leaf Nation. Rachel traces her ancestry to Southern China. She spent much of her childhood memorizing Chinese poetry. After long stints in New York, New Haven and Cambridge, she has returned to China to bear witness to its great transformation. She is currently based in China.
  • http://twitter.com/alanatpaterra Alan Engel

    This article missed the punchline. CCTV is using celebrities as shills. http://offbeatchina.com/china-state-medias-accusation-of-apple-backfired

    • BobbyWong

      Alia from OffBeatChina mistranslated Ho’s tweet. It said “Probably post around 8:20″, not “must” (notice Da Gai was left out and “must” inserted).

      It was in reality Peter Ho giving instruction to his assistant on when to tweet. Ho casually said “Probably send out around 8:20″, it was not from the Chinese government.

  • http://www.facebook.com/stewsburntmonkey David Stewart

    Given that Apple tends to favor replacing instead of repairing everywhere in the world, this seems like a rather dubious claim. The replacement policy is actually quite beneficial as it allows consumers to avoid long repair periods, then device can be immediately replaced and the defective one sent off for repair or salvage without any time pressure. I’m not sure why a warrantee should be extended just because the device is repaired/replaced. Some small additional warrantee for the repair/replacement should be given, but it doesn’t seem reasonable to reset the warrantee clock. I’m not really sure Apple needs to worry too much about this. If they continue to build products people want China is going to continue to buy them despite the propaganda.

    • Sacto_Joe

      Maybe the backs of many of these phones are monogrammed. That’s been the case with several of my older iDevices. Maybe it’s a way to keep the registration number for tracking the phones with a given service, or avoiding counterfeit phones. Who knows? It seems a silly thing to complain about. When you bought your phone, it had an implied warranty. Is this a case where people are trying to extend their warranties for free by having a “problem”?That would hardly be fair, now would it?

      Again, avoiding emotion and having a logical discussion is usually the best approach to determining the facts. On the other hand, some aren’t interested in determining the facts, just in spewing “FUD”….

  • twilson

    what utter tripe. everywhere that i’m aware of the warranty is from the date of PURCHASE. So a replacement is kind of irrelevant, as you didn’t purchase it.

  • lucascott

    The lack of a restarted clock is the same everywhere. So that detail is wrong. Plus they aren’t paying for the swaps as they are under warranty so really why do they care that the whole thing is replaced. If they were paying it would be different

  • Tim Vronay

    they should send the production of Apple products back to the USA and see how many iPhones Apple can sell when the cost is over $3,000

    • GaryOh

      What’s your point? Do you think Apple should start the warranty clock from scratch in China, every time they replace the item under warranty? They don’t do this anywhere else in the world.