Apple's Terrifying New Enemy

04/11/2013 8:30 am EST

Focus: STOCKS

Jim Jubak

Founder and Editor, JubakPicks.com

Competitors like Samsung are one thing, but now it looks like the Chinese government may be after Apple, and that could have real implications for the company, says Jim Jubak.

The first week of April hasn't been very kind to Apple (AAPL). It's had a patent overturned...but the big story is in China, where the Chinese media has started to complain, to voice consumer complaints about the quality of Apple's repairs, about Apple warranties.

The big story here really isn't that Apple had these problems. I don't think Apple really does have significant problems in China different than it's got anywhere else. What's important here is the kind of concerted, organized, government-sponsored attack on Apple as a consumer stock.

Campaigns from the Chinese Consumer Protection Agency, from the Chinese media, from the Chinese state-owned television networks are very, very familiar to foreign companies. Frequently, for example, this is kind of a shakedown process, where a foreign company is really told, "Hey, we're going to run a negative story on you unless you, you know, actually pay a bribe or do some quid pro quo for the state broadcasting company," or some of its employees or whatever like that.

This seems to go beyond that. This seems to be not simply that kind of mid-level shakedown. This seems to be an attempt to, well, either support domestic Chinese phone makers, who are working against Apple and having a hard time getting traction against Apple's iPhone, or it's an attempt really to just to sort of Google-ize Apple. That's the big worry.

If you remember, Google (GOOG) was basically forced out of the Chinese market after a concerted campaign that looked at charges like, well, Google was optimized to help people search for pornography in China. Simply not true...it was all about censorship and getting the Western company to sort of conform to government standards for censorship. Google refused. Google is now not a player in China.

The question is really, what's the long-term effect of this for Apple in China? China is Apple's big, big potential growth market; so in the face of this concerted campaign, Apple basically apologized, said it would try to do better, went out and got in front of the story. It took a while, but it did do the things that you're supposed to do in China when you're accused of these kind of things—you eat crow.

The question is, is that going to be enough, or are we looking at some really concerted attempt to change market share in China using stories like this and the power of government to help Chinese companies? Big question for Apple...important question for Apple.

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