China to Apple: We’re mad at you, but we won’t say why.

A day after the global media weighed in on the mysterious comeuppance Apple received recently from the Chinese government for its allegedly discriminatory customer service, the tea leaves are being thoroughly and widely read.

Veteran Apple-watcher  weighed in with an intriguing look at the brouhaha, headlined:  Why is China’s state-run media targeting Apple? Five theories.’

Even if they turn out to be off the mark, the theories still make for fun reading, so take your pick:

  • Apple is behaving badly. It’s possible that the company does in fact discriminate against Chinese users with second-rate return and warranty policies. We don’t really know because Apple has done such a bad job explaining what those policies are.
  • Apple hasn’t courted the right officials. That’s also possible, although when he visited Beijing last year, CEO Tim Cook made a point of meeting Li Keqiang, and Mr. Li is now China’s prime minister.
  • China is trying to bolster its domestic smartphone makers. It’s true that there are a number of Chinese manufacturers fighting for a share of the domestic smartphone business, but none of them really compete directly with Apple’s high-end phones.
  • China is trying to strengthen the hand of its state-owned mobile phone operators. China Unicom (CHU) and China Telecom (CHA) already sell iPhones, so the most likely beneficiary would China Mobile (CHL), the world’s largest carrier and the only major Chinese operator that still hasn’t cut a deal with Apple.
  • China is retaliating for Congress’ treatment of Huawei and ZTE. Last year, the House of Representatives’ Intelligence Committee issued a report labeling China’s two flagship telecom companies a security risk and urging U.S. firms not to do business with them. This would be payback.

During my interviews for a story my colleague John Boudreau and I did on the matter, I had an interesting talk with Stanford University professor Hau Lee, considered by some to be a guru of supply-side management and a keen observer of American companies like Apple doing business in Asia. He had actually just arrived in China when we had our email exchange. He had a very different, and far less suspicious, theory about why China was going after Apple in a big and very public way. Here’s an excerpt:

  In an email from China where he’s traveling this week, Lee said he thinks the CCTV bashing is actually a sign of the Chinese government’s growing focus on helping consumers by shining more light on the way companies do business there.

   “While there may be some flexing of muscle’’ by the Chinese government toward a powerful player like Apple, Lee said the criticism may just be an example of “a gradual shift in the government’s underlying policies towards consumerism over the last few years. It’s certainly been public knowledge that the government wanted to encourage consumer spending as part of their overall economic policy,’’ Lee said. “To do so, they are actually giving more rights to the consumers, and the Chinese government has encouraged more transparencies in the supply chain, especially in the environmental and social-responsibility’’ arena.

   Lee said that by supporting public criticism of Apple, and pointing out what he sees as unfair treatment of iPhone customers, the government is essentially giving consumers more power to consume. “I believe the Apple incident is part of this overall scheme.’’




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