Apple apologises to China

"We recognize that some people may have viewed our lack of communication as arrogant".

After a two week long attack from China's media and regulators, Apple CEO Tim Cook has issued this apology to Chinese customers. He had little choice - China is Apple's second largest market after the US (making up 16 per cent of Apple's sales in 2012), and the attacks showed no sign of slowing.

Here's China Daily on Sunday:

The China Consumer's Association (CCA) has asked Apple Inc. to 'sincerely apologize to Chinese consumers' and 'thoroughly correct its problems,' after the US firm took little action to address waves of criticism. The CCA said that, in 2012, it twice urged Apple to properly handle the complaints but only received halfhearted replies, with the real problems unsolved.

And here's the People's Daily on Monday:

It remains to be seen whether this global tech giant will be pressurized to respond to the complaints, as China market becomes an ever-bigger part of its global operation.

On Tuesday, Apple gave in. Here are some extracts from the apology:

To our valued customers in China: In the past two weeks, we have received a significant amount of feedback about our repair and warranty practices in China. We have thoughtfully considered the feedback, carefully reviewed the return, repair and replacement policies with regulators, and examined how we communicate our hardware warranties as well as manage our service provider compliance. In the process of studying the issues, we recognize that some people may have viewed our lack of communication as arrogant, or as a sign that we didn't care about or value their feedback. We sincerely apologize to our customers for any concern or confusion we may have caused.

If a customer's iPhone cannot be repaired quickly by replacing a component, then Apple provides a repair subassembly, consisting of all-new parts attached to the back of the customer's existing iPhone 4 or 4S. However, it has been suggested that since the repair subassembly is nearly a full replacement, it would be better for our customers to receive a replacement unit instead. So, starting this month, Apple will upgrade our iPhone 4 and 4S service kits to full replacement units with all-new parts and a new one-year warranty starting from the date of replacement.

Customer satisfaction, which is our most important measure of success, has been exceptionally high for these repairs -- almost 90 percent on average.

It's clear this is mostly political - Apple's new repair and warranty policies in China will actually now be better than the US version.  As the Economist noted "It is not unusual for foreign companies to come under occasional attack in China. Sometimes, this is well deserved—as when, last year, KFC was exposed for supply-chain lapses that led chickens of dubious quality to be served in its restaurants. But the CCTV exposé, which discussed warranty-repair policies, did not find anything remotely as rotten at the core of Apple’s China business."

An Apple logo in Beijing. Photograph: Getty Images
Photo: Getty Images
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Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.