4. Apple's Apology
Look. We admit Tim Cook is in a no-win position following in the footsteps of tech legend Steve Jobs. But that doesn't mean Apple's (AAPL) CEO has to continually act like such a loser, now does it?
Cook apologized to Chinese consumers Monday for his company's iPhone warranty policies. Prior to Cook's kowtowing, the technology giant suffered two weeks of repeated beatings in the state-run media about its after-sales service. Government-controlled media outlets including China Central Television (CCTV) and the People's Daily newspaper chastised Apple for its "arrogance," saying its current one-year service plan was far less comprehensive than those it offers in smaller markets.
"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 Web site. "We express our sincere apologies for causing consumers any misgivings or misunderstanding."
It's about time Tim! CCTV went on-air with its charges on March 15th. Why on earth did it take you till April Fools Day to concede you acted like a fool in your second largest market? Have you not noticed the parade of apologies by the folks at Yum! Brands and Wal-Mart following their Chinese product problems? Come on buddy. Everybody knows by now that you better be quick to be contrite in China. Why didn't you?
And yes, we understand that this whole kerfuffle is less about a faulty product than a Politburo power trip. There is enough freedom of speech squeaking through the cracks over there for us to realize that this is not a true consumer revolt. We know this because as long as it took Tim to draft his apology, that's how fast the Chinese government magnanimously accepted it. On Tuesday, the Foreign Ministry praised Apple for "conscientiously" responding to so-called consumer demands saying, "We approve of what Apple said." Let's be serious folks, these guys don't want to give up their iPads over a silly warrantee issue. Not in the least! And especially not after they just downloaded Taylor Swift's new album on iTunes. Still, even if Cook put this episode behind him and learned a valuable lesson in the process about responding quicker to Chinese authorities, he may be running out of time with an entirely different set of overlords. On Tuesday, Goldman Sachs (GS) yanked the technology giant from its Americas Conviction List, saying that it doubted the company's ability to hit consensus estimates for the next two quarters. Goldman maintained its buy on the stock, but lowered its 12 month price target to $575 from $660 previously. Whether or not that was a veiled shot at Cook's competence, we don't know. But Tim may want to start cooking up an apology just in case. It's all he's got going for him right now.
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