Apple at a China Crossroad

No, we're not stirring the pot again on our proposed Jobs' trip to China. We're referring to the impending collision between business decisions and political appeasements. Apple will have some serious decisions to make over the next few months regarding this lucrative market. Just this week reports surfaced that iTunes in China has been blocked due to Pro-Tibetan content, specifically, the "Songs for Tibet" album, added this week.

Apple, like many global companies faces serious questions in China. How should this situation be resolved? Give in to pressure from China and remove the album, at the risk of a backlash from around the world, or stand firm and risk losing what could easily be one of their most lucrative iPhone markets? And yes, there is the tiny detail that many Apple products are manufactured in China, as well.

What will Apple do? Well, there is one small incident that might give us a hint. Last year, Venezuelan president Hugo Chavez decided to unilaterally change the time zone of Venezuela by half an hour. As you probably have noticed, most time zones are segmented by hours. The move placed Venezuela in its own time zone. As of July, Apple hadn't added the half hour offset for Venezuela in its time settings, causing problems like these. Microsoft on the other hand, had an update out within a few weeks acknowledging the time zone change. Was this lack of change an intentional political statement on Apple's part? If so, would they be as willing to take that sort of stand with China?

Dealing with China will be a far more high-profile, and high stakes process. Apple was wise to bring Andrea Jung from Avon onto the board early this year. At the time, the move was seen as a smart way to learn to market more effectively to women in China. In reality though, Jung could prove even more important as Apple navigates the Chinese political landscape.

While Apple has been a global brand for decades, China may be the first significant time in which a decision they make - to pull the Pro-Tibet album or not - will displease at least one major group of potential customers. Our bet: the album will disappear from the Chinese iTunes store, iTunes access in China will be restored, and except for a few protests (perhaps a letter from Richard Gere?) we'll all forget this happened. On the other hand, if it's a slow news cycle, or the issue is painted against the bigger backdrop of doing business with China, then this might not go away as quickly as Apple would like.


So put on your CEO hat. What would you do if you ran Apple?