Piper Jaffray analyst Gene Munster has noted the significance of the “growing middle class and under penetration of smartphones in China” which he believes will play a part in Apple’s continued meteoric rise. However, it appears that Apple may have come up against a hurdle in the populous country.
Apple has come under fire in China for not abiding by the country’s strict consumer-protection laws. A consumer advocacy group in the southern province of Guangdong has alleged that Apple has violated these consumer-protection laws through offering insufficient after-sales care service.
Chinese law requires that when companies replace damaged products they do so with brand new parts, and that they update the warranty period accordingly.
Apple replaces damaged parts in iPhones with other used or remanufactured parts, and it does not update the warranty, according to the Chinese consumer watchdog.
The organization released the result of its industrial investigation on Tuesday. The investigation refers to an iPhone owner who found his smartphone was malfunctioning during the warranty period. The company replaced all parts of the device except for the case and battery charger, but refused to renew his warranty.
Apple is said to be working to modify its after-sale service standards to be in compliance, reports WantChinaTimes.
The news comes days after Apple saw a 28 per cent revenue drop from the Chinese market. During the conference call announcing Apple’s financial results, Apple CEO Tim Cook said Apple’s sales revenue from China during the period from April to June rose 48 per cent year-on-year to US$5.7 billion, however this was a 28 per cent decrease from US$7.9 billion in the first quarter, claims the Jakarta Post. Sales of The New iPad were not included in that revenue figure as that device only launched in China in July.