1. MacDirectory 75
FEATURE
APPLE IN CHINA
WORDS BY ANDREA DE LEON • IMAGES BY MARC RESSANG AND MINWEI
The first Apple store in Shanghai, located at the IFC Mall in
downtown Luijiazui, includes a 40 foot glass cylinder above
ground. Made with the largest glass panels in the world, it is also
literally surrounded by a moat. Down a winding staircase at the
entrance, the underground store is 1500 square meters and
stocked with more merchandise than any other single Apple store
in the world.
Its appearance is no surprise, considering its location—surrounded
by some of the most impressive
buildings in the world, Apple’s Senior
Vice President claims it was built so the
“stunning architecture” would fit in with
the store’s location—its design suitable
enough to stand next door to the
Shanghai World Financial Center and
the Oriental Pearl Tower—buildings that
ultimately stand as a reflection of the
Chinese dominance in a number of
industries and its need to maintain such
an appearance.
The biggest difference immediately
noted is price points: Chinese electronic
products are notably more expensive
due to a 17% Value Added Tax (VAT)
and import tax, and Apple products are
no exception. An iPad mini in the U.S.
starts at $329; in China, $405. The
iPhone5, for example, costs
approximately $857 USD: a pretty
penny compared to the phones
manufactured for the U.S. that start at $649.
Phones in Asia are often purchased unlocked at a full price—many
choose to buy from Hong Kong, where taxes have not made the
products unattainably expensive. However, the initial price of a
phone is often offset by the average monthly bill for the typical
Chinese iPhone user— between 50 and 100RMB, or approximately
$8 to $16USD. Common practice is to bypass the contract with a
carrier and simply buy pre-paid credit each month—an option
made easy since the iPhone had not yet
been offered through a carrier in China
until 2009.
China Unicom had, up until March 2012,
enjoyed the benefits of being the only
carrier in China to offer the iPhone with
phone packages. China Telecom joined
with the release of the iPhone 4S,
leaving only China Mobile out in
the cold.
The difficulty in releasing the iPhone
with China Mobile lies in the
incompatibilities between the Apple
hardware and the wireless carriers
service; China mobile offers 2G speeds
and Wi-Fi for data, as well as utilizing
TD-SCDMA, a 3G frequency developed
by the Chinese Academy of
Telecommunications Technology, that is
incompatible with global GSM and
CDMA network device.
Image by Marc Ressang
Image by MinWei Image by MinWei
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2. FEATURE
76 MacDirectory
Fortunately, this is no longer a problem—the three wireless carriers
in China are planning to spend a total of approximately 345 billion
yuan ($56 billion) this year on network upgrades, multiplying
broadband speeds up to five times for smart phone users on
these networks.
There are over 7.4 million iPhones being used within the China
Mobile network. With over
700 million users, China
Mobile serves double the
number of subscribers as
Verizon and AT&T combined.
However, none of the
iPhones used have been
purchased through the
carrier—a detail that only
proves users are willing to go
out of their way to get their
hands on an Apple product.
Especially among foreigners
in China, common practice is
to bring in a foreign mobile
and “jailbreak” the product—
rendering it usable on any
network. The obvious
setback being that a jailbreak
renders the phone unable to
be updated (until a new
“jailbreak” is released,)
and voids any warrantee on
the product.
In an effort to solidify ties
with the Chinese market,
Apple has decided to release
the iPhone 5S through China
Mobile in July 2013, a move
that places Apple directly
into the hands of consumers
in the largest mobile network
in the world. Apple CEO Tim
Cook has made a number of
trips to China, meeting with
the carrier to establish the
official ties that will bring the
5S to Chinese consumers.
The announcement comes
after a number of setbacks
that Apple has faced in
expanding its Chinese
market. A 25-year-old man in China, Sun Dayong, reportedly
committed suicide after losing an iPhone 4 prototype in his
possession in July of 2009; one of many suicides that Foxconn, a
Taiwanese headquartered manufacturing company dealt with in a
series of controversies. In 2009, Apple hired the Fair Labor
Association to investigate working conditions in Chinese factories
and found that overtime pay was insufficient, and work related
accidents were relatively common.
When the iPhone5 was released in 2012, boycotts ensued
involving the Diaoyu islands—two land masses that have been
claimed by both the Chinese and Japanese. The iPhone5 lists the
islands twice—a duplicate set right next to the first—one set
named Diaoyu and the other
Senkaku. Seen as a blatant
refusal to recognize the
islands as belonging to China,
Chinese users took to Weibo,
a Chinese micoroblogging
site, demanding a boycott;
the duplicate islands are
being seen as a reflection of
Apple’s political stance.
State Department
spokeswoman Victoria
Nuland later clarified in a
briefing that the islands fall
under the scope of Article 5
of the 1960 U.S.-Japan Treaty,
obligating the U.S. to defend
these islands on Japan’s
behalf.
Most recently, state-run
media has accused Apple of
offering lower levels of
service than it offers to its
customers in Australia and
the United States, regarding
warranty for its products.
Specifically, “ignoring Chinese
consumers, substandard
customer service, suspected
tax evasion and a steadfast
refusal to admit wrongdoing
when it’s caught out.” Apple
consumers in China are given
only a one year warranty
instead of two, and when
products are brought in for
repair within that year, they
are given refurbished parts or
replacements. Soon after, a
flood of public figures and
celebrities took to Weibo,
demanding that Apple
acknowledge—and
apologize—for the inequality in service.
Several other companies have also encountered similar
problems—Volkswagen was accused of using a direct shift
gearbox transmission that was causing vehicles to slow down or
speed up during driving. A notable difference was Volkswagen’s
Image by MinWei
Image by MinWei
Image by MinWei
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3. FEATURE
MacDirectory 77
reaction—the company chose to issue an immediate apology and
a promise to recall both locally made and imported cars using the
gear box.
In 2012, both McDonalds and KFC have lost market shares in China
because of scandals involving the use of expired ingredients in
their food.
In the United States, companies and their products are tested by a
slew of consumers and then subjected to user reviews; this exists
in China with the addition of the state-run media, which takes it
upon itself to expose fraud in foreign companies hoping to
expand within Chinese borders.
While the release of this information regarding quality and safety
in foreign products is expected in any setting, what creates
suspicion from a Western perspective is that Xinhua news agency
is state-run, and often used to promote the interests of the
Communist regime.
Apple’s initial reaction was to deny the allegations set forth, and
indicate the politically motivated nature of them. Some analysts
estimate that reports such as these are created solely to prevent
foreign-run companies from storming in on the Chinese middle
class at the expense of local businesses; the government must
“save face,” or establish its superiority so as not indicate the
pattern of a weak, impressionable society.
Deeply rooted in the Chinese tradition of “Saving Face,” the
Chinese government takes to a method of censorship that
encompasses all industries and media—mostly famously
symbolized by what is know as the “Great Firewall.”
Deng Xiaoping, reformist leader and politician for the Chinese
Communist party until his death in 1997, aptly described the
sentiment, saying, ““If you open the window for fresh air, you have
to expect some flies to blow in.” The firewall is an effort to retain
Communist values and political ideas, even while economically
expanding internationally.
According to the state-run Xinhua news agency, the government
only blocks “superstitious, pornographic, violence-related,
gambling, and other harmful information.”
In basic terms—the government requires that any companies
seeking to expand in China play by China’s rules, including those
of censorship; a lesson that companies like Google have learned
the hard way.
Soon after the controversy over the Apple warranties in China,
CEO Tim Cook wrote a letter of apology, promising to
communicate more effectively in the future and guaranteeing
improved product quality; a wise move, considering the July 2013
launch of the iPhone5S with China Mobile.
However, it was not a complete victory. Since the apology, China’s
Ministry of Industry and Information Technology has promised to
keep a closer eye on the tech giant. Some suggest the real reason
the Chinese government has targeted Apple is to start setting up
an atmosphere in which Apple can be pressured into complying
with China’s censorship laws; this is quite a jump, but expected
when considering China’s refusal to work with entities outside the
boundaries of censorship.
So, the challenge begins to mirror that of what Google faced in
2010. A decision to disregard the laws deeply rooted in the
Chinese Communist perspective has left the search engine, as well
as its other services, working with a system that is constantly
working to slow it down—in China, Baidu remains the top search
engine, providing faster service, and representing a victory for
Chinese tradition and its government.
If Apple hopes to thrive in a country in which pleasing the local
government and media have a heavy hand in dictating success,
some would say it has a decent chance—from the products
themselves to the glass tower marking the location of the first
store in Shanghai, Apple’s exterior in the world of electronic goods
is unsurpassed. The more difficult journey should not be
providing quality products in the future, but realizing that while
China offers huge potential, it will only welcome outside
influences on its own terms—not much more than is demanded
by the American government and its own consumers.
For more images please visit:
http://www.flickr.com/photos/minweiphoto/
Image by Marc Ressang Image by Marc Ressang
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4. FEATURE
78 MacDirectory
Image by Marc Ressang
Image by MinWei Image by MinWei
Layout:
China is the world’s second-largest country by land
area, and third or fourth by total area.
Population:
China is the world’s most populous country with more
than 1.35 billion inhabitants and a density of 139/sq.
kilometer. The largest city is Shanghai, with a population
of over 23 million and a density of 6340.5/sq.
kilometer. Because of the current one-child policy, there
are currently 32million more males than females.
Language:
There are ten linguistic subdivisions of Chinese, the
most commonly spoken one being Mandarin, followed
by Wu, which includes Shanghainese.
Education:
All citizens must attend school for at least nine years,
and in order to be accepted to a Chinese university,
high school students must pass the GaoKao—an exam
much more daunting than the SAT.
Food:
A staple in Chinese cuisine is rice, but the Chinese were
best known for their spices in past centuries, and are
well known for their meat dishes.
Religion:
A survey in 1998 shows that approximately 59% of
Chinese are non-religious. Taoism and Buddhism have
had the greatest influence in shaping Chinese culture.
Architecture:
Chinese architecture has changed very little since its
beginnings, thousands of years ago, save the decorative
details. It has influenced the architect of Korea,
Vietnam, and Japan. In urban cities, traditional
architecture has often been passed over for more
modern styles—traditional Chinese buildings typically
are not more than 3 stories high.
Economy:
China has the worst 2nd
largest economy, and the
fastest growing major economy. As part of reforms in
the 1980’s, more independence has been granted to
businesses run by a government enterprise.
Agriculture:
An ancient Chinese legend tells the story of a man
named Shen Nong Shi, who took it upon himself to find
other food sources as the rise in population created the
need for more food. He tasted many herbs and even
poison before selecting the grains that could be
consumed by people. Beyond the legends, Chinese
agriculture can be traced back to 10,000 years ago.
Arts:
Chinese arts encompass everything from fine art, folk
art, and performance art. Chinese painting, in
particular, is one of the most continuous artistic
traditions in the world; landscape painting was
considered the highest form of Chinese painting.
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