This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

What Cook's Apology Means for Apple in China

Stocks in this article: AAPL

NEW YORK ( TheStreet) -- So, all's well with China now that Apple (AAPL) has apologized, right? No! Recognition that there's a problem and identifying that problem is only the first step towards cessation, so says Buddha. To achieve China nirvana, Apple must walk the path. Apple again, leads the way.

Let's be realistic about this, Tim Cook's apology does not guarantee anything, other than more kowtowing. All it did was elicit the reaction the Chinese government was looking for ... capitulation. This is a negotiating tactic. Now that China has Apple at a disadvantage, and by proxy all the other non-Chinese manufacturers (I guess this is a short list, including; Apple, Google (GOOG), Samsung and a handful of others), it's time to extract the rest of the plan.

Ultimately China doesn't want any of these outside companies to have a dominant position in Chinese markets. But for now, they need them, and perhaps they can develop a sufficient stooge to extract IP, co-opt it and make it their own. That is the ultimate goal.


There are plenty of analysts saying this was a colossal blunder on Tim Cook's part. An argument made by Shaun Rein, Director and Founder of China Market Research, is that Apple has already lost significant market share at both the top end by Samsung and at the low end by Lenovo and Huawei, and should instead concentrate on opening up more markets.

Rein speculates that China is trying to promote domestic manufacturers and OS providers. While this may be true in principle, there's no current mobile manufacturer that can ultimately fit the bill. They simply don't have the technology or capability. And this practice isn't exclusive to mobile companies, it extends to other markets and premium brands known for great quality and service, such as BMW and Mercedes, who've been getting their own share of media lambasting.

Another argument is that it's foolhardy to give an inch to China, because they'll take a mile. Where will it stop? Apple is already tops in service, but now they've essentially given China a better warranty and service policy than any other market. What's next, free phones?


1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,828.24 +0.49 0.00%
S&P 500 2,067.60 -5.23 -0.25%
NASDAQ 4,791.63 +4.3130 0.09%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs