Apple's bi-polar China disorder

In the Hutong

To breakfast, or not to breakfast

0936 hrs.

So here is the deal.

Apple starts selling an album called "Songs for Tibet" on its iTunes Music Store (iTMS), and they do it right in the middle of the Beijing Olympics. Coincidence, or passive-aggressive middle finger to China? Apple isn't saying anything about it, so we are left to reach our own conclusions.

Next, word gets around that a bunch of Olympic athletes staying here in China - reports say as many as 40 - have purchased and downloaded the album.

Yesterday, people around China began noticing that the iTMS is no longer accessible from China. A few of the more tech-minded actually decided to try to use traceroute to figure out why. They confirmed that access to iTMS was being blocked by China.

You mess with the bull...

Without getting into a debate over the politics, let's look at the business issue.

Apple is in the early stages of a much belated (and arguably long-overdue) push into China. After nearly two decades of near-invisibility, the company opened its first Apple store in China just three weeks before the Olympics. A second Beijing store is under construction, and Ron Johnson, Apple's senior vice-president of retail, said there are many more China stores to come.

At the same time, Apple is apparently deep into negotiations with at least one Chinese carrier to start selling a (fully-enabled) iPhone here in China.

And of course, Apple has finally begun making headway in the market against its rival computer, phone, and music player rivals.

By selling "Songs for Tibet," Apple has placed these efforts in jeopardy.

Apple has given the government all the excuse it needs, not only to block the iTunes Music Store, but to raise extra barriers on permits for further Apple retail stores, to throw barriers in the path of Apple's iPhone deals with state-controlled carriers, and to make the creation of a Chinese iTunes Music Store and App Store a distant dream (unless the let the carriers run it.)

Not to mention make the lives of thousands of dedicated Apple customers here in China just a little more miserable - especially those of us who count on iTMS as our sole source of legitimate (non-pirated) music.

And Apple is alienating the very market it is trying to create in all of these efforts, infuriating the legions of Chinese who believe that the situation in Tibet is far more nuanced than the media, activists, and general public outside of China understand.

...you get the horns.

I am sure there were valid marketing considerations behind the decision to sell "Songs for Tibet." I'll even grant the (specious) possibility that there was a good business reason to do so during the Olympics. If not, Apple was certainly within its rights to make a political statement.

But Apple - and its shareholders - must recognize that its own actions are sabotaging its efforts to build a market in China right as those efforts are showing fruit. Such a bi-polar approach to this market is not sustainable. Apple management needs to choose between developing China as a market or the freedom to engage in random acts of passive-aggressive panda-punching.

Making that choice, as much as real estate and labor expenses, is part of the cost of doing business in China.

Comments

[Bloggi]

Well, I would say, any Apple users make their life an incalculable misery by buying Apple products in the first place.

What Apple has displayed in terms of arrogance and indifference versus its customers is something big M from Seattle would not get away with - at least not, without being cut into four even pieces after the due public outcry. ;-)

[William]

In my opinion, it's entirely possible that the people who made the decision to release this album are totally unaware of the unfortunate timing and the political problems it could cause for Apple. To me, this is just another sad example of the Chinese government's egotism and hypersensitivity getting in the way of what should be a normal market entry.

[mutikonka]

In other words Apple should sanitise/censor its iTunes inventory so as not to displease the Chinese Communist Party? Are there any other politically incorrect artists and songs that Apple should be looking to remove form iTunes? Perhaps they could hire someone from Baidu to work on this.

[David]

mutikonka,

I don't think Apple should sanitize or censor anything. Nor am I saying the Chinese government, the CCP, or any individual Chinese who are offended by this are right or wrong.

I do think that featuring and promoting the Tibet album during the Olympics - which activists have attempted highjack as a negative symbol of the Tibet issue - was unfortunate if not stupid timing (they couldn't maybe have waited two weeks?) In China, it could be read as Apple giving the PRC the big middle finger, and not just by the Party, but the people as well.

Right or wrong, the failure to exercise some institutional foresight could create problems for their business in China. I agree with William - I don't think it was intentional, it was a screw-up.

But the fact that Apple did not anticipate a potential problem in China with the album or even see it coming is further evidence that the company is as ill-prepared for some of the issues and choices they will face here as Google, Yahoo!, and MSN were (and arguably still are.)

[Peter]

David,

I think your "panda-punching" and "institutional foresight" approach reflect one of the core problems with China today: Instead of welcoming different opinions and competition, individuals and corporations (are encouraged to) apply self-censorship to try to achieve some financial benefit. This behavior feed the corruption monster that is a significant problem within the Chinese society (and government structure) by increasing the non-transparency which is bad for business and general development of the society.

Opinion-influencers (incl bloggers) with interest in advancing China's development must help highlight and address these challenges - not encourage the status-quo.

PS: And yes - I work in China and I do know this is not easy; change is never easy nor painless but sometimes necessary.

[Arlor]

"the situation in Tibet is far more nuanced than the media"

BULLSHIT

Sorry it to late for China, some day everybody will know exactly what happen in Tibet since 1950.

Hiding the true is futil, it just look stupid, crime is a crime.

Good lock,

[HAO]

Hello,

I do not write English best, but want to write feelings.

American company try to bring bad things into China, bad ideas and make Chinese think bad things about country.

China people is like a child, they need only good idea so they can be good people for Republic. Make good baby, and defend honor of China against enemy.

Then the company cry that they not making money from China. Steve Jobs, take money by give respect to Chinese people.

HAO

[JZ]

What about Apple's American customers? I hope Apple contintues to sell this music and I am going to download it right now.

[At the Money]

This is nothing more than a PR stunt by International Campaign for Tibet (ICT) and Art of Peace Foundation. The album was put on the front page of iTune store on the opening day of the Beijing Olympic Games. It would be interesting to find out how much copies have been sold so far. Unfortunately, the Chinese government took the bait and made it a headline.

Note that AP casually left out the fact that these 40 Olympians were offered to download the $11.99 album for free (http://technology.timesonline.co.uk/tol/news/tech_and_web/article4579783.ece). So not only “free Tibet” is trendy, it is now also free. What’s not to like?

So much for “an act of solidarity” as declared by the executive director of Art of Peace Foundation.

[At the Money]

This is nothing more than a PR stunt by International Campaign for Tibet (ICT) and Art of Peace Foundation. The album was put on the front page of iTune store on the opening day of the Beijing Olympic Games. It would be interesting to find out how much copies have been sold so far. Unfortunately, the Chinese government took the bait and made it a headline.

Note that AP casually left out the fact that these 40 Olympians were offered to download the $11.99 album for free (http://technology.timesonline.co.uk/tol/news/tech_and_web/article4579783.ece). So not only “free Tibet” is trendy, it is now also free. What’s not to like?

So much for “an act of solidarity” as declared by the executive director of Art of Peace Foundation.

[bill]

Seriously? Do you have any idea how many albums are on iTunes? Get over it... if China could get Moby, Ben Harper, Dave Matthews, etc to put together an anti-Dalai Lama album, iTunes would probably sell that too. Hell, they're selling 2 Chinese Olympic albums, and those aren't even remotely good albums.

[Richard.Boey]

So called Tibet activities or supporter is BULL-SHIFT. Mind yr own business and Remember how American Red Indian being killed and prosecute by White settler. Why so quiet and do they get being compensated? Mentality of Western Policy to Asian and Arabic to split and rule. Why should we kowtow to those Western Dog.

[Paul]

Once again an over reaction by China.

China wonders why the west (?) doesn't understand it.

Well, this is a perfect example.

Why not just ignore iTunes and the song?

This is why people laugh at China and the way it tries to do things.

[Joyce Hor-Chung Lau, Hong Kong]

Some Chinese have this odd view that everyone has to consider them first in decision-making. One comment about U.S. cyclists who wore anti-pollution face masks was, "didn't they consult a Sinologist first?" Of course they didn't. Why would an American athlete consult a China expert over physical preparation? People of the world do what they do -- train for sports, make music, do business -- not necessarily with China's "face" in mind.

iTunes has zillions of songs. These sites are not even China-based. Apple is not going to check with every major government in the world before releasing every song -- on its own U.S. website. I'm sure it has lyrics that would offend Catholics, feminists, various activists, etc. It can't self-censor to please everyone.

iTunes is a store. You buy what you like. If you don't like it, nobody is forcing you to use it. There's no need to block access to more than a billion people because of 40 purchases.

It's ALWAYS a sensitive time in China. Since March, we've had Tibetan rioting, a marred torch relay, a tragic earthquake, and the Olympics. In Beijing's view, no time is a good time for anything it doesn't like.

Hao -- I hear where you're coming from. There's been much criticism and bad news, some of it unfair and much of it hurtful. To use your analogy -- babies need good things to grow. But sometimes they need to fall down or be scolded. China needs to accept both good and bad. It can't just block everything it dislikes.

Richard -- "Red Indians"? You're talking about violence that dates to the 17th century. Thank god we're not digging out all the killings in the last 400 years of Chinese history.

It has nothing to do with iTunes. You're looking for an excuse to bash another nation. That just adds to conflict between people, when we should be looking for cooperation.

P.S. iTunes works just fine in Hong Kong.

[Yawns]

Steve Jobs is at the point in his career that he really doesn't need to appease China by having his company remove one CD of songs which might offend one nation of people just to make money. What would such do, exactly? Allow him to have 300 unique black mock turtlenecks rather than 365(/356) for each day of the year?

[Terrance McDermott]

I think Apple should remember the lessons taught by the Brown Shirts in Germany. Don't be surprised if the Chinese Government begins burning their Ipods and Iphones in order to ramp up fear and keep their population in ignorance.

[Lee]

There is not much to debate, it is simply that China is a Fascist state and it does what it wants. Unlike tin pot fascist state in developing countries, China is a super power and economic muscle to match. China will use it power to suppress any criticism of the government and over react on everything. It is China's stupid over reaction that is giving China the negative image in the world.

[Fyre Vortex]

Oh COME ON!!! Seriously. I really need the iTunes. Whether it's in China, or Hong Kong, I still need it. I need a store that accepts Paypal and that also has DRM-free music.

Seriously!!!

Amazon is not going to go because of their Credit-Card-Only policy.

-FyreVortex

[Fyre Vortex]

I think China should have a compromise so that China can filter and pull out any song at any time and then the Apple people should review if that is infringing the China policy and if it is, then it is out of iTunes China.

But Apple should still have the control, but China can have the option, as I said above.

-FyreVortex