To be or not to be an open market, that is the question? Why were Apple’s movie and book services closed in China week ending 22nd April 2016?

Last week saw Apples Movie and Book online services closed in China, reportedly by the SAPPRFT Chinese content regulator one week after Apples Hong Kong iTunes Service was due to release a controversial Hong Kong film censored in China.

While the Chinese government has their prerogative to regulate content through censorship, and in a country plagued by piracy will this policy cause a setback to Apple in China?  I don’t think so.  Yes, it will marginally affect revenue, but Chinese do not buy Apple Mac’s, iPhone’s and iPad’s for iTunes content, Chinese buy for the branding and reliability.

China is now Apples 2nd biggest market with reported US$16.823 billion in revenue for Greater China (China, Hong Kong, and Taiwan), up 71 percent year over year Q2 2015 with an additional 100% revenue growth in the app store.

Apple paid 6.45 billion Yuan (US$982.92 million) in taxes in China last year (2015), becoming the third-highest taxpayer in the service sector in Shanghai, reported by the National Business Daily.

Is the service closure due to media bans or due to Apple’s success in China?  On 11th July 2015, iPhones were branded a threat to national security, is content regulation now the next hurdle?  Is this about the support of local brands such as Xiaomi and Haier?  Is creating challenging environments for non-Chinese brands to operate the future norm?

Is China on a Mac Attack?  As was seen on the 12th April 2016, Ronald McDonald ‘arrested’ by Guangzhou Chengguan officers.

There is clearly Chinese government support for China corporations to acquire global brands and become world leaders, seen recently with Haier’s acquisition of GE Appliance division.  Let’s hope global fair trade is fair, and the closure of the Apple Movie and Book service is only due to SAPPRFT content regulation and not market protection.

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