Apple Inc. (NASDAQ:AAPL) apologizes to Chinese consumers, revamps service Apple Inc. (NASDAQ:AAPL) apologizes to Chinese consumers, revamps service; iPhone prepares to launch in Brazil, and rumors of iOS 7 delay.
Goldman Sachs’ summary: After two weeks of criticism from Chinese state-run media, Apple CEO Tim Cook apologized to Chinese consumers on Monday. The issue at hand was Apple Inc. (NASDAQ:AAPL)’s warranty policies in China, which media outlets decried as shorter and less comprehensive than in other countries. Mr. Cook’s letter, published in Chinese on Apple’s local website, apologized for insufficient external communication and announced that its after-sales service policies in the region would be overhauled.
Goldman’s take: China is Apple Inc. (NASDAQ:AAPL)’s second largest market by revenues, and one which still represents a substantial opportunity for further growth. The company has put “enormous effort” into gaining traction in the region, and many have noted that Mr. Cook’s latest act of deference underscores the region’s importance to Apple Inc. (NASDAQ:AAPL)’s bottom line. In their view, the apology was a smart strategic move by Apple’s management, even if it was somewhat unpopular with the US press this week.
iPhone pricing inches closer to reality in Brazil
Goldman summary: To make the iPhone more affordable in Brazil, the region’s yet-to-open Apple Inc. (NASDAQ:AAPL) Store is said to plan on deducting some taxes (approximately $100) from the final selling price of these devices. This would bring the prices paid by Brazilian customers close to what American consumers pay for the same devices, per reports from Globo newspaper in Rio de Janeiro. At the time of the reports, the Apple online store still quoted higher prices in Brazil. Last November, local media outlets had said that Apple plans to open a physical retail store in Rio during 2013, but the company has not confirmed such plans.
Goldman’s take: Goldman believes price-sensitivity is a factor impeding adoption in emerging regions, particularly Brazil, where taxes and duties compound the already-premium prices of Apple Inc. (NASDAQ:AAPL) products. While the company hasn’t officially disclosed plans to open retail stores or effectively lower iPhone prices in Brazil, management has admitted to putting considerable effort into this market. They believe that Apple can leverage much of the strategies from its China penetration into other BRIC economies.
Design overhaul said to be coming for iOS 7
Goldman summary: The Verge reports that the Worldwide Developer Conference is just months away and that all eyes will be on iOS 7. According to reports from the blog Daring Fireball, Apple is said to be behind schedule on the release of iOS 7, and engineers from OS X 10.9 have been pulled in to work on iOS in order to meet the deadline. Apple Inc. (NASDAQ:AAPL)’s VP of industrial design, Jony Ive, is reportedly driving a more substantial change in the interface, pushing for a more modern, “flat” design than previous installments.
Goldman’s take: This iOS update will be the first since the departure of Scott Forstall, who previously ran the division at Apple Inc. (NASDAQ:AAPL). Upon his departure, his responsibilities were shifted to Jony Ive, whose role was expanded to cover Human Interface design, and Eddy Cue, who took Apple Maps and Siri into the online services group. The changes prompted many in the press, including The Verge, to speculate that iOS was due for a bigger-than-usual update.
