“After Apple’s quarterly report last week nearly every analyst we heard from pointed out that the company’s 37.5% gross margin — the measure of how efficiently a company turns sales into profits — was at very bottom of its 37.5%-to-38.5% forecast range,” Philip Elmer-DeWitt reports for Fortune.
The theory is this: On the last day of the quarter Tim Cook, to appease government-owned media outlets that for two weeks had been attacking Apple on a daily basis, issued an apology to his Chinese customers and changed Apple’s warranty and return policies — among other things, extending the warranties on any iPhone brought in for repair in China for a full year,” P.E.D. reports. “According to the company’s SEC Form 10-Q, Apple booked $414 million in so-called warranty accruals to account for the impact of changes to certain unnamed ‘service policies and other estimated warranty costs.'”
P.E.D. reports, “Morgan Stanley’s Huberty estimates that if it weren’t for China’s media campaign and Cook’s response, Apple would have reported a gross margin of approximately 38.4% — just shy of the top of its guidance range.”
Read more in the full article here.
MacDailyNews Take: The whole thing is unsavory. Extortion. Blackmail payoff.
RomeBeijing, we guess, but, yuck. It begs the question: Now that China’s been successful, what will they try next?
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