When Google was aggressive in its efforts to boost traffic and advertising sales in China several years ago, one of Google's competitors had a brilliant idea. The company had reportedly compiled a list of censorship laws that Google had allegedly violated in China and turned over the list to the Chinese authorities.
Internet users who were visiting Google's google.cn Web site were for some reason being redirected to a rival search engine, Baidu.com. This is according to a source of a USA Today report. The said source is an expert in media and technology companies.
In his previous job, this expert was tasked to develop the Chinese market for the benefit of a media company in the U.S. In 2010, four years after the search giant began google.cn, Google shut down its operations in China after its servers suffered repeated cyberattacks. Google had traced the source in China.
After Google left, Baidu.com had 63 per cent market share. Google's market share in early 2006 was 27 per cent while Baidu had 47 per cent.
Meanwhile, Apple Inc has been widely rumoured to market two new iPhones in China in September. One is reportedly a lower-priced version, the iPhone 5C, while the other is the iPhone 5S, the successor of the iPhone 5. The iPhone 5C is expected to be pushed in emerging markets like India and China that are saturated with low-cost Android phones.
Apple Inc has earned $4.6 billion in China in the June quarter of 2013. However, the Chinese market has not given Apple a boost as expected. Apple's sales fell 14 per cent in China.
Apple's momentum in China seems to be in a reverse as state-run media agencies broadcast and published stories about Apple's warranty policies which were allegedly not consumer-friendly as the ones available to American customers.
Apple has also been hit by reports of iPhone-related incidents involving an exploding iPhone 5 and electrocution due to charging iPhones.
After the Chinese government has criticised Apple Inc for its "unfair" policies, CEO Tim Cook has apologised to its Chinese customers about its warranty policy.
Reports of Apple Inc getting a deal with China Mobile may be attempts to make an aggressive push for Chinese customers to buy more iPhones. If Apple does release a cheaper iPhone, the company should get the pricing right since there is no guarantee it will be warmly welcomed.
Given Google's history in China, Tim Cook may want to reevaluate his company's financial investment there if sales will continue to fall in the last quarter of 2013. Investors will be looking at China more closely now.
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