Apple in China: Big business and problems with Hong Kong and Taiwan

Apple has recently been accused of cashing in on China in several cases, both for banning app-related protests in Hong Kong and for flags of Chinese political enemies being lost.

Posted  46 Views updated 10 days ago

Both of these cases are relatively recent and have occurred in recent weeks. Apple's 13.1.1 update has, for example, caused the loss of a Taiwanese-flagged emoji, not only from Chinese devices, but also from Hong Kong and Macau Apple phones.

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Although it does not appear to be a major problem, Taiwan, also known as the Democratic Republic of China, is probably the largest and most ancient of the political opponents of the People's Republic of China. After the Second World War, the government of the Democratic Republic of China, which captured China's mainland, went to exile on Taiwan, a country the People's Republic does not even want to acknowledge.

China simply treats the island as one of its own provinces and refuses to recognize it. In order to maintain good relations, many other countries have also avoided it, including the vast majority of European countries and the United States.

The fact that the Taiwanese flag has now disappeared from the facilities in Hong Kong and Macau, which is known to have been the subject of major protests against China in recent times, calling for greater autonomy, is therefore significant. The provinces that crave freedom should not receive a constant reminder that somewhere there are Chinese already living under a different regime. Apple, however, has given no reason to remove the flag and has not commented on the situation.

Confusions with the map application

Another problem that Apple has recently been accused of is also the protests in Hong Kong. Namely, local developers created a map application, HKmap.live, to show protesters where police patrols are currently located.

While the developers did not have a problem with the Google App Store, the app initially got banned due to payment issues. After resolving this issue and resubmitting the app, the developer was again greeted with a laconic message. "The content of this application is to enable and encourage illegal activity, specifically to prevent police patrols," Apple initially commented to developers and decided that such an application was not relevant to the platform.

However, this led to a serious channel of criticism, which led Apple to rethink, and now the app is completely available in the Apple App Store. Even with this application, Apple representatives have not commented on why the application was finally released on the platform and why it was not initially intended.

Great business and a slippery road

Apple CEO Tim Cook has also admitted that doing business in China is not the easiest. "We would rather not remove applications from our platform, but just as in other countries, we will abide by local laws in China," Cook said in 2017 when Apple banned all VPN applications that allow local censorship at its app store bypass and visit foreign websites.

Responding to national demands is also increasingly important to Apple in the context of the US-China trade war, which is one reason why US technology giant sales in China have fallen by as much as 30 percent. Canalys report shows that Chinese are increasingly choosing Huawei over Apple, one reason being patriotism and banning Huawei devices elsewhere.

But analysts point to other reasons: "While there are over 300 million Apple phones in China, the company has problems adapting its devices and services to the local market," Canalys analysts write. "Also, the fact that new technology and 5G devices are expected to be launched only next year will probably further diminish sales success."

But sales and revenue are not the only reason why China is so important to Apple. Much of the design of iPhones also takes place at factories in China, Shenzhen and Zhengzhou. If the company were to quarrel with the Chinese central government, it could also mean problems in maintaining production and even exporting.

For example, a 25 percent duty would cost Apple $ 160 more to produce each iPhone XS. The company would be left with the option of either absorbing the price increase itself and thus losing the already badly hit profit or trying to pass it on to the end consumer.

Katy Huberty, an analyst at banking group Morgan Stanley, has told EXE News, for example, that Apple is one of the most vulnerable US companies in China, which could be seriously caught in the gears of both trade war and central power. And that's why maintaining a good relationship with Apple is important, often with methods that can be considered immoral in the Western world.

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