Apple Warranty Policy: Apple Inc. (NASDAQ:AAPL) may be learning the hard way that you don’t want to make the wrong people made. If you have been paying attention to the latest drama in China, you know that the Cupertino-based company is in a bit of hot water regarding its warranty policy and treatment of the media.
Earlier today, we touched on this story here. In fact, Apple Inc. (NASDAQ:AAPL) CEO Tim Cook has realized the importance of what is going on and subsequently issued a letter of apology to the Chinese.
The question is: has the damage already been done?
As we noted in this article, Apple is not making any friends in China despite the fact that the tech giant hopes to spend more time, money, and resources in the country in the near future.
With a state-sponsored anti-Apple campaign in place, this could spell disaster for Apple Inc. (NASDAQ:AAPL).
In fact, Citi’s Glen Yeung feels that this bad press could lead to a loss of $13 billion in sales in China.
AppleInsider.com took a close look at what Yeung had to say, focusing on the financial impact of “previous Chinese state-sponsored campaigns against other companies.”
Here is what Yeung had to say:
“Recall that a similar campaign hit HP in 2010, leading to a ~50% reduction in their PC share in China. Apple derives ~16% of its sales in China (CY12) and China accounted for ~24% of Apple’s revenue growth in the past 2 years (2010-2012). If Apple were to lose as much as 50% of their China market share, this would equate to ~$13.1B/$3.62 in revenues/EPS. We add this to our list of concerns about Apple’s market share dominance and still do not recommend the shares at this time.”
Although Apple Inc. (NASDAQ:AAPL) CEO Tim Cook has taken personally to control the damage, one has to wonder if the situation is beyond repair at this point. In most cases, there wouldn’t be much to worry about. However, based on past occurrences, these types of state-sponsored negative campaigns can have a huge impact. This holds true even among some of the largest brands in the world.
What is next for Apple Inc. (NASDAQ:AAPL) in China? Share your thoughts in the comment section below.
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DISCLOSURE: I have no positions in any stock mentioned.
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