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Case Study 12.2: Apple in China: Choosing Sides

Hong Kong protests held the world’s attention in 2019, as hundreds of thousands of Hong Kong residents occupied the streets to stand up against what many felt were direct affronts on their freedoms at the hands of the Chinese government. According to organizers, over 2 million people took part in a summer of 2019 march, with hundreds of thousands more involved in smaller protests that led to over 2,600 injuries and 7,000 arrests in less than a year’s time. These protests were initially triggered by a bill put forth by the Hong Kong government, which would have allowed for the extradition of criminal fugitives to China. As the protests waged on, numerous accusations of police brutality and government suppression emerged from the front lines.

Beyond the streets, multinational corporations the world over felt pressured to take sides. While many individuals and companies offered support for the Hong Kong protestors, China, in its customary manner, was quick to withdraw its business from any organization seen as critical toward its government. When a National Basketball Association executive from the Houston Rockets tweeted support of the Hong Kong protests, China wasted no time pulling back from negotiations with the entire league, canceling games and undoing plans that had been months, even years, in the making. Time and again, China has proven that it will not waver from its strict rules and viewpoints. Compromise is not an option.

Apple is caught in the crosshairs. Many Hong Kong residents made use of an iPhone app called HKmap.live, which was designed to help citizens track the locations of police activity and protests throughout the region. According to the app’s developer, it was designed to help people feel safe navigating the city, helping them to avoid trouble hot spots as they get on with their lives. However, the Chinese government claimed HKmap.live was being used by activists to organize protests and demanded that Apple remove the program from its app store. Apple CEO Tim Cook was quick to defend his company’s decision to disable the app, saying “the app was being used maliciously to target individual officers for violence and to victimize individuals and property where no police are present. This use put the app in violation of Hong Kong law.”1

If this were an isolated incident, it would not be a major problem for Apple. Yet the removal of HKmap.live was just the latest China-related issue that the company has faced. In the recent past, Apple has faced scrutiny for its seemingly tone-deaf response to reports of poor working conditions in Chinese factories manufacturing components for Apple products. In 2017, the company was criticized for removing VPN apps, used by many customers to freely access the internet, from its app store when the Chinese government deemed them illegal. In a statement, ExpressVPN wrote, “We are troubled to see Apple aiding China’s censorship efforts.”2 In reply, Cook explained at the time that “we would obviously rather not remove the apps, but like we do in other countries, we follow the law wherever we do business.”3

For Apple, the stakes are high. Executives want to cooperate with the Chinese government while maintaining a positive reputation with their customers and investors. Over 750 million Chinese use cell phones, and that number should continue to rise. In China, Apple is battling against local mobile powerhouses like Huawei, vivo, and OPPO for increased market share. Thus far, it has been a losing battle, with Apple’s portion of the market dipping below 10% in 2019, a near 50% drop. Against a backdrop of increased tensions between the White House and China’s government, shareholders and citizens are carefully watching Apple’s response to criticisms in East Asia.

In the case of HKmap.live, Apple eventually gave into public pressure and reopened the app for download. While many questions remain regarding the circumstances behind the company’s reversal, the outcome appeared satisfactory to most. So when Apple followed this move by removing the Republic of China flag emoji, used to represent Taiwan, from the iPhone keyboard in Hong Kong and Macau, the company’s critics were once again disappointed.

To many, the real question to which Apple CEO Tim Cook needs to respond is less about HKmap.live or any other incident and more about the company’s true priorities. Is Apple willing to hold up the integrity of its services and products for the good of its users worldwide? Or will the company appease the Chinese government at almost any price? The answers remain to be seen, and that makes many of Apple’s users, and investors, more than a little uncomfortable.

Sources: Bilton, R. (2014, December 18). Apple “failing to protect Chinese factory workers.” BBC.

Doffman, Z. (2019, September 13). Apple’s iPhone 11 launch highlights Huawei’s lock on China. Forbes.

Doffman, Z. (2019, October 6). Apple fails to get it right in China again. Forbes.

Myers, S. L., & Buckley, C. (2019, October 13). American basketball vs. Chinese hardball: Guess who won? The New York Times.

Smith, J. (2017, July 30). Apple removes VPN app from China app store to comply with government. ZDnet.

Welch, C. (2019, October 10). Apple CEO Tim Cook defends removal of Hong Kong mapping app in email to employees. The Verge.