Already facing slumping iPhone Sales, the fruity cargo cult Apple will have to explain to Wall Street how it miffed the Chinese government so much that it was banned from running its mobile entertainment empire behind the Great Firewall of China.
Apple online book and film services were switched off over the weekend, which was a bit of a downer given that Jobs’ Mob hoped to spin the service as a way of making pots of cash while people were not buying their iPhones.
Apple’s favourite newspaper the New York Times reported that a state regulator demanded Apple halt the service. The move came after Beijing introduced regulations in March imposing strict curbs on online publishing, particularly for foreign firms.
Apple said in a statement on Thursday that it hopes to make the services available to customers in China as soon as possible and the New York Times said that Jobs Mob had a lot of contacts in the Chinese government who would help out.
However the Chinese government might be a little miffed with Apple. Jobs’ Mob bragged before a senate committee that it had the power to tell the Chinese government that they were not allowed to lift data from iPhones.
Frank Gillett of research firm Forrester said that this might be the beginning of more pressure on Apple by the Chinese government.
The company released its book and movie services in China only late last year, leaving Chinese consumers little time to form a habit.
Chinese consumers’ appetite for the iphones is critical to quarterly earnings. Apple is expected to post its first-ever quarterly drop in iPhone sales, to about 50 million units, reflecting a saturated global market.
Wall Street expects adjusted earnings per share to drop 14 percent to $2.00 and revenue to drop 10 percent to $52.0 billion.