There were multiple state sponsored attacks against Apple recently, right from attacks on social networks to patent suits to ads on TV media. In a possible effort to dethrone Apple and encourage local manufacturers the Chinese state owned networks employed various possible means, though the extent of damage is not known yet, Apple could lose a potential $13 billion revenue in China says Citi’s Glen Yeung.
Chinese government resorted to similar tactics before to damage reputation of brands like Toshiba, HP and YUM (part of KFC) and seems to have been quite successful. After negative campaigns against each of those brands, YUM had witnessed a decrease of 20% in sales, Toshiba lost its No. 1 spot in notebook market and HP took a severe hit with loss of 50% of its marketshare in China and estimating a similar extent of damage to Apple as well it will be losing around $13 Billion of revenue in the current financial year.
Apple is trying every possible thing to expand its base in China, including launching its phone on China Mobile, world’s and China’s largest mobile network. After the recent fiasco, Tim Cook reacted instantly and issued an open apology to Chinese consumers even where there was no wrong in the way Apple;s warranty policies were structured in China. The policies offered to Chinese consumers were similar to what Apple offers elsewhere but knowing the value of having a strong presence in China Apple took necessary steps in reframing its policies and offering something better.
Apple seems to have earned almost 27% of its revenue from China in the past two financial years and analysts believe that the revenue generated from China will surpass that from US by 2017 which shows the potential Apple has in China, the recent IDC report also suggests that China will have 3.5 times the number of smartphone users by 2017 than in US.