It must have come as a shock to the Apple Universe when the ruling Chinese Communist Party (CCP) recently announced its decision to ban all iTunes movies and eBook services. The move was made as part of the CCP’s desire to reject the westernization of its people in favor of traditional ideas. It would also seem to be an attempt to protect the technology industry that resides within China’s borders from outside poachers.
From a financial standpoint, this could be a devastating decision for Apple’s revenue flow and bottom line. In recent years, the marketplace in the mainland China region, which also includes Taiwan and Hong Kong, has accounted for approximately 25% of the technology giant’s sales revenues.
The CCP’s actions come amid exhaustive efforts by Apple’s CEO Tim Cook to build a relationship between his company and China’s leaders. Based on estimates, Cook has made at least seven trips in recent years to mainland China as the company’s ambassador. Regardless of how he felt things were progressing, it is once again clear that what China says and what China does are two entirely different things.
Of course, Cook could have saved himself a lot of money, time and effort has he consulted with other US technology leaders like CEO Mark Zuckerberg of Facebook and CEO Jack Dorsey from Twitter. Both of these companies have been trying to make inroads into the China region despite the fact that both of its products and services are currently blocked throughout that region.
At risk for all these international technology giants is the opportunity to break into and gain status in one of the most dynamic markets on the planet. If it’s not Apple, it could be anyone else that the Chinese government might arbitrarily decide to favor while leaving all other competitors sitting on the outside looking in.