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
Show Hide image

Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.