The Shanghai Stock Exchange Composite Index is down 0.10% while the NASDAQ is down 0.87% after rallying the past few days. Contributing to the fall of the NASDAQ is the performance of the manufacturing stocks.
China is indisputably a large market to contend with. This is the reason why some US companies are rethinking their China policy when it comes to their products and services. Let’s take a look at three US companies with issues in China.
Apple Inc. (NASDAQ:AAPL) bends backward over service issues
Apple Inc. (NASDAQ:AAPL) Chief Executive Tim Cook apologized for the company’s iPhone warranty and repair policies in China after the state media accused the firm of arrogance and greed. Its stock swooped down in its biggest decline since Jan. 24. To retaliate, Tim Cook promised to improve training, customer service and monitoring of stores authorized to sell its products in China.
“We are aware that a lack of communications led to the perception Apple Inc. (NASDAQ:AAPL)’s attitude was arrogant and that we do not care and attach importance to consumer feedback,” Mr. Cook wrote. “We sincerely apologize to our customers for any concern or confusion we may have caused.”
While China may be a big market after the US, with sales of $22.8 billion in 2012, Apple Inc. (NASDAQ:AAPL) still lags behind other smartphone manufacturers like Samsung Electronics and Lenovo. They still have to contend with the fact that China’s biggest wireless carrier, China Mobile Ltd. (ADR) (NYSE:CHL), is not selling its iPhone to consumers.
This apology underscores Apple Inc. (NASDAQ:AAPL)’s bid to make China Mobile Ltd. (ADR) (NYSE:CHL) its biggest source of revenue in the coming years.
Google Inc (NASDAQ:GOOG) searches for less censorship on digital media
Google Inc (NASDAQ:GOOG) might be one of the best places to work for but apparently, China’s political leadership does not like its hold on the internet crowd. In a move to curtail searches that are done on the internet, online censorship is being done by the Chinese authorities. This has been a sore point between Google Inc (NASDAQ:GOOG) and Chinese authorities since May last year.
In a move to warn its China users of the censorship, they quietly dropped warning messages but to no avail. The battle was lost when Google Inc (NASDAQ:GOOG) decided last December that the effort to fight the technical disputes was not productive since users were still being disconnected by Chinese authorities.
Google Inc (NASDAQ:GOOG)’s dramatic relationship with China started since 2006. This was the year it started its search function the country. China however is cracking down on internet usage in the country and this affected Google Inc (NASDAQ:GOOG)’s service in China. Censorship will always be an issue in China and Google has to contend with the fact that it cannot skirt around this technicality.
It is not April Fool’s sale for Microsoft Corporation (NASDAQ:MSFT) in China
In the country with a piracy issue over its licensed products, Microsoft Corporation (NASDAQ:MSFT) began to sell its Surface Pro tablet on April 2. China still is the biggest consumer market. Hopefully, Microsoft Corporation (NASDAQ:MSFT) will not have a copyright infringement lawsuit from a Chinese manufacturer like Apple Inc. (NASDAQ:AAPL) for the use of the Siri technology.
Software may be one problem of Microsoft in China but for this new product, it is counting on China’s big consumer market to add tremendous revenue to its coffers. China is still giving priority to its local software makers over Microsoft licensed software. Who knows what local manufacturers might come up with to rival Microsoft’s Surface Pro tablet?
Bottom line
China has undoubtedly a big impact on the bottom line of the three companies mentioned above. The size of its market and its population means more business for the companies. The government authorities of China and its media watchdogs might interfere with the big multinationals’ way of doing business. However, whether it is a protectionist policy or censorship, the consumers should come out as the winners.
The article Oh China! Give up Some Slack originally appeared on Fool.com and is written by Stefanie Soriano.
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