Apple weathers anti-U.S. demo in China, where patriotic protests snowball

Sat Jul 23, 2016 8:12pm EDT
 
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HONG KONG (Reuters) - Apple Inc (AAPL.O: Quote) found itself on the receiving end of a small, short-lived anti-U.S. protest this week in China, the tech firm's biggest overseas market and a country where foreign firms have suffered damaging boycotts following international spats.

A handful of unofficial Apple stores were picketed and social media users encouraged each other to destroy their Apple goods, in a rare instance of the tech firm being targeted as a symbol of perceived injustice following an international ruling against Chinese territorial claims.

Though the protest was small, observers have expressed concern about the impact on Apple in the long term, citing the roughly year-long slump in sales of Japanese cars after a diplomatic dispute that prompted large protests and boycotts.

"There's not much Apple or any other foreign firm can do to prevent such patriotic protests," said analyst Nicole Peng at researcher Canalys, who sees no impact to Apple's sales from the recent protest. "These incidents happen every few years."

Apple did not immediately respond to a request for comment.

China is the world's biggest smartphone market and Apple is increasingly reliant on its growing middle class as it competes with domestic makers of cheaper phones such as Xiaomi Inc [XTC.UL] and Huawei Technologies Co Ltd [HWT.UL], in a climate of weakening consumer spending and slowing economic growth.

Adding to Apple's challenges are brushes with regulators. Its online book and film service was blocked earlier this year, and last month its iPhone designs were ruled to have infringed a local firm's patent.

Apple's sales in China fell around 25 percent in January-March from the same period a year prior. On Tuesday, it is scheduled to announce April-June earnings that are widely expected to be lackluster due to a dearth of product launches.

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A 3D printed Apple  logo is seen in front of a displayed stock graph in this illustration taken April 28, 2016. REUTERS/Dado Ruvic/Illustration/File Photo