Apple has been barred from selling iPhones without a charger in Brazil and fined more than $2 million over the issue, the government said Tuesday, after accusing the US tech giant of “discriminatory practices.”
In an official notice, Brazilian authorities ordered “the immediate suspension of the distribution of iPhone brand smartphones, regardless of model or generation, that are not accompanied by a battery charger.”
The Ministry of Justice and Public Security ordered the California company to pay a fine of 12.28 million reais (nearly $2.4 million).
The measure from the Department of Consumer Protection and Defense effectively prohibits the sale of all iPhone 12 and 13 models.
Apple has been under investigation in Brazil since December for “the sale of an incomplete product,” “discrimination against the consumer” and “the transfer of responsibility to third parties” by offering iPhone 12s and newer versions without chargers for power outlets, according to an official statement.
The company has faced fines from Brazilian state agencies before, but “did not take any measures to minimize the harm and until now continued to sell the cellular devices without chargers,” the statement said.
According to Brazilian authorities, Apple alleges that the decision to exclude chargers from iPhone sales comes from an “environmental commitment.”
But the ministry determined “there is no effective demonstration of environmental protection on Brazilian soil as a consequence” of Apple’s policy, and accused the company of “deliberate discriminatory practices against consumers.”
“There is no justification for an operation which, in aiming to reduce carbon emissions, leads to the introduction into the consumer market of a product whose use depends on the acquisition of another (product) which is also marketed by the company,” the official notice added.
Chip supplier Qualcomm Inc won a second court skirmish in its worldwide patent battle with Apple Inc on Thursday, with the iPhone maker saying it would pull some older models from its German stores.
Qualcomm’s win in Germany comes weeks after it secured a court order to ban sales of some iPhone models in China. Apple, which is contesting both rulings, has continued to offer its iPhones in China but made changes to its iOS operating system in the wake of the Chinese order.
The German victory may affect only a few million iPhones out of the hundreds of millions that Apple sells each year. Still, it is a small but clear win in a complex legal battle that will spin into overdrive in the coming months as antitrust regulators and Apple both take Qualcomm to court in the United States.
Apple alleges that Qualcomm engaged in illegal behaviour to preserve a monopoly on modem chips, which help mobile devices connect to wireless data networks. Qualcomm has, in turn, accused Apple of using the chip supplier’s vast stable of technology innovations without proper compensation.
The U.S. Department of Justice and the Securities and Exchange Commission are investigating whether Apple Inc violated securities laws concerning its disclosures that it slowed older iPhones with flagging batteries, Bloomberg reported on Tuesday.
The government has requested information from the company, Bloomberg reported, citing people familiar with the matter.
The chairman of a U.S. Senate committee overseeing business issues asked Apple to answer questions about its disclosures, Reuters reported this month.
Apple did not immediately respond to a request for comment. An SEC spokesman and Justice Department spokeswoman declined to comment.
The company admitted in December that iPhone software can slow down some phones with battery problems.
Apple said the problem was that aging lithium batteries delivered power unevenly, which could cause iPhones to shut down unexpectedly to protect the delicate circuits inside.
Apple posted a public apology over its handling of the battery issue and lowered the price of iPhone battery replacements from $79 to $29.
Apple on Thursday confirmed what some conspiracy theorists suspected, that it intentionally slows the performance of older iPhones as batteries weaken from age.
The admission played into concerns that Apple was stealthily nudging iPhone users to upgrade to newer models by letting them think it was the handsets that needed replacing and not just a matter of getting new batteries.
“Our goal is to deliver the best experience for customers, which includes overall performance and prolonging the life of their devices,” an Apple spokesperson said in response to an AFP inquiry.
“Lithium-ion batteries become less capable of supplying peak current demands when in cold conditions, have a low battery charge or as they age over time, which can result in the device unexpectedly shutting down to protect its electronic components.”
Lithium-ion batteries are commonly used in mobile devices, and charging capacity naturally wanes with use and time.
Meanwhile, smartphone operating software is perpetually improved with updates that typically increase appetites for electricity.
Last year, Apple introduced a feature to “smooth out” spikes in demand for power to prevent iPhone 6 models from shutting down due to the cold or weak batteries, according to the California-based company.
The iPhone 6 made its debut in late 2014.
The feature, which slows performance to demand less power, has been extended to iPhone 7 handsets with the latest iOS operating software and will be added to other Apple products “in the future,” the spokesperson said.
Apple releases new iPhone models annually, and sales of the handsets power its money-making engine.
People worried about performance could replace batteries, which Apple does for free for iPhones covered by warranty or for $79 if that is not the case.
Apple design of handsets makes it borderline impossible for people to change batteries themselves.
Rumors have persisted for years at tech news websites devoted to Apple products and among fans of the company’s products that iPhone performance was being intentionally slowed, perhaps to push users to buy newer models.
The consumer electronics industry overall has routinely been accused of designing products that wear out sooner than necessary in a strategy referred to as “planned obsolescence.”
In reaction to a statement by Taylor Swift saying she was refusing to allow the company to stream her album 1989, Apple Music has reversed its payment policy.
In an open letter to Apple, Swift said she was withholding the record as she was unhappy with the three-month free trial offered to subscribers.
On Twitter, Apple’s Senior Vice President of Internet Software and Services, Eddy Cue, said Apple Music will pay artist for streaming, even during customer’s free trial period.
Swift had said the plan was “unfair”, arguing Apple had the money to cover the cost.
”I find it to be shocking, disappointing, and completely unlike this historically progressive and generous company,” the 25-year-old said, describing Apple as one of her “best partners in selling music”.
”Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing.
”We don’t ask you for free iPhones. Please don’t ask us to provide you with our music for no compensation.”
Apple Music launches on 30 June. It will cost $9.99 (£6.30) per month in the US for one person or $14.99 for families.
After hearing news of the company’s decision on Sunday night, Swift tweeted:
Meanwhile, Mr Cue said he did not know if the ‘Shake It Off’ singer would now make her album available on Apple Music, but he praised her for taking a stand.
“When I woke up this morning and I saw Taylor’s note that she had written, it really solidified that we needed to make a change,” he said.
With its rare apology, Apple Inc went from pariah to praiseworthy in the eyes of China’s state-controlled media, a lesson for other foreign firms not to underestimate the speed and power of the government press.
After coming under near-daily media assault for the past two weeks and facing the threat of penalties from two Chinese government bureaus, Apple apologized to Chinese consumers on Monday for poor communication over its warranty policy and said it will change the terms for some of its iPhones sold in China.
Greater China is Apple’s second-biggest and fastest-growing market, with sales up almost 40 percent to $6.8 billion in the final quarter of 2012.
The Chinese newspapers that threw brickbats at Apple a few days ago have since changed their tune.
“The company’s apology letter has eased the situation, softening the tense relationship between Apple and the Chinese market … Its reaction is worth respect compared with other American companies,” wrote popular tabloid the Global Times, published by Communist Party mouthpiece the People’s Daily.
The Foreign Ministry praised Apple for “conscientiously” responding to consumers’ demands.
“We approve of what Apple said,” spokesman Hong Lei told a daily news briefing on Tuesday.
Only last week, the People’s Daily issued a scathing editorial on Apple’s return policy saying the popular smartphone maker was filled with “unparalleled arrogance”.
Apple was first targeted in mid-March by state broadcaster CCTV during its annual consumer day segment. Volkswagen AG, which was also criticized on the same show, plans to recall vehicles to fix a gearbox problem.
“That Timothy Cook had to step up and respond from the CEO’s chair shows the importance of China and how critical it is as a market not just for Apple but for every multinational company here,” said Kent Kedl, Shanghai-based head of Greater China and North Asia for risk consultancy firm Control Risks.
Foreign companies who are adept at managing media crises at home find it much tougher to navigate China where state media outlets, pandering to different audiences, often have opaque agendas and intentions. Analysts also said that foreign companies need to remember that the bigger the brand, the bigger a target it will be, especially in China.
“What foreign companies need to pay attention to, is that nobody operates in a vacuum, nobody operates only on the good graces of a brand name … Five to ten years ago a report on CCTV would have rippled a little bit, now it goes viral and has a life of its own,” Kedl said.
NOT APPLE’S FIGHT TO WIN
Apple’s acquiescence in this setting, where the world’s largest technology company by market value was ironically the David going up against China’s Goliath state media machinations, shows its wisdom in not challenging a more powerful enemy.
Although popular opinion on the Internet swayed in Apple’s favor, against state media and the reported threats of penalties from China’s State Administration for Industry and Commerce as well as its quality and inspection bureau, it was not Apple’s fight to win, experts said.
Other foreign companies targeted by CCTV, such as fast food chain operator Yum Brands Inc, have also apologized and faced scrutiny from government agencies. Last December CCTV reported that two of Yum’s suppliers purchased chickens from farmers who used excessive levels of antibiotics in their animals. The report and subsequent investigations hurt sales at Yum’s KFC chain.
But Apple’s situation is somewhat different because CCTV’s claim was not completely new. Last July, a Chinese consumer rights group also slammed Apple for its after-sales policies. That time, however, Apple held its ground.
With the apology and warranty change, Apple’s mea culpa is significant not just because it comes from a tech firm that rarely apologizes, but also because Apple may be realizing that in China, it needs to be proactive.
“They’re out of the woods and into the weeds. Things will rarely be smooth for Apple in China – even if consumers love it there will always be factions in and out of government that are trying to take it down,” said Michael Clendenin, managing director of technology consultancy RedTech Advisors.
“Apple made it easy this time, but they have learned to be more proactive. The next time they stumble, it will be easier to recover,” he said.
Apple Inc became the top mobile phone seller for the first time in the lucrative U.S. market during the fourth quarter of 2012, outshining arch rival Samsung Electronics Co Ltd, a report by Strategy Analytics showed.
Apple’s share of the U.S. mobile phone market, including feature phones and smartphones, jumped to 34 percent from 26 percent, while Samsung’s share grew to 32.3 percent from 31.8 percent, the research firm said.
Samsung had been the top mobile phone vendor in the US since 2008, the firm said. Indeed, for the full year, Samsung still held the crown for mobile phone sales; it had a 31.8 percent share of the U.S. market in 2012, against Apple’s 26.2 percent.
Apple investors have recently been anxious about the future growth prospects for the company amid intense competition from Samsung’s cheaper phones, powered by Google’s Android software, and signs the premium smartphone market may be close to saturation in developed markets.
Overall, mobile phone shipments rose 4 percent to 52 million units in the U.S. during the fourth quarter of 2012, driven by strong demand for 4G smartphones and 3G feature phones.
But in all of 2012, U.S. mobile phone shipments fell 11 percent to 166.9 million, Strategy Analytics said.
Apple sold 17.7 million iPhones in the U.S. in the fourth quarter, up 38 percent from the previous year, driven by aggressive marketing of its new iPhone 5 and steep carrier subsidies, the firm said. Samsung shipped 16.8 million phones during the same period.
In the international arena, Samsung Electronics, with a range of handsets, has overtaken Apple as the world’s top smartphone seller.
Phone manufacturing company Samsung has announced that it has sold more than 30 million flagship Galaxy S III smartphones in about five months, making it one of the fastest selling smartphones in the world.
Samsung Electronics Co, the world’s biggest mobile phone maker made this announcement today and it launched the smartphone at the end of May, months before competitors began shipping the latest versions of their top phones.
When Apple Inc., unveiled the iPhone 5 in September, Samsung launched an advertising campaign poking fun at the new iPhone.
The South Korean firm said the S III is selling at a much faster rate than its predecessor announced a year ago, the Galaxy S II. The S II took 14 months to hit 30 million sales. Sales of the Galaxy Note II, which fills a market niche between smartphones and tablets, surpassed 3 million in 37 days, Samsung said last week.
The runaway demand for high-end smartphones fuelled record profits at Samsung in recent quarters while other consumer electronics firms were hit by the global economic downturn that dented demand for TVs and personal computers.
Research firm IDC ranks the South Korean firm as the world’s top smartphone seller in the last three quarters. In the latest July-September period, Samsung sold 56.3 million smartphones versus Apple’s 26.9 million, IDC said.
Samsung, which also makes TVs, home appliances, semiconductors and display panels, got almost 70 per cent of its third-quarter operating profit from the division that makes mobile devices, cameras and computers.
Nomura Financial Investment in Seoul forecasts that Samsung will sell 67 million smartphones in the October-December quarter. That would be about 10 million units more than Samsung’s smartphone sales in the previous quarter.
Samsung does not disclose its quarterly smartphone sales figures, but analysts and research firms say the company sold a record 56-58 million smartphones in July-September.
Nomura, which is more optimistic about Samsung’s prospects than other forecasters, says Samsung’s mobile communications business will post 5 per cent growth in fourth quarter profit from the third quarter, thanks to the high-end phones – the S III and the Note II.
Samsung increased its lead in terms of smartphone shipments as estimate shows that the total number of smartphone shipments exceeded 157 million in Q3 2012. The Korean company shipped a record 56.3 million which was almost double the number of iPhones shipped by Apple (26.9 million). The Galaxy S III played a key role for Samsung with estimated sales of 18 million in the third quarter. Things are getting so dire for RIM and Nokia that ZTE has got ahead of them. LG did well amongst the Tier 2 players compared to rivals like Huawei, Motorola and HTC.
Nokia’s insistence on failing to ship an Android based handset and stick to its Windows Phone (W7 Mango) devices meant sales fell a whacking 63 per cent compared to Q3 2011.
The Finnish company shipped just 6.3 million smart devices in the third quarter. Though there’s hope for Nokia as the Xmas season always see strong sales growth for everyone.
In its report, ‘Smartphone Evolution Strategies: Premium, Standard & Economy Markets 2011-2016′, Juniper says, “Samsung has been highly effective in leveraging its global brand strength and the popularity of the Android OS to drive sales of smartphones in all price tiers.”
With Windows Phone 8 devices due to become commercially available shortly plus the fact that in the UK, for example, its offers handsets to run on EE’s 4G LTE network.
No such luck for RIM which unbelievably won’t actually ship a BlackBerry 10 smartphone until Q1 2013 – just when everybody has bought a new phone.
At least the Canadian firm managed 7.7 million quarterly smartphone shipments, so it piped Nokia.
Given RIM’s emphasis on the business sector missing Xmas may not harm its Q4 sales as much as expected.
Even LG sold more smartphones than Nokia as it posted a 24 per cent quarter-on-quarter (q-o-q) growth to a record 7 million smartphone shipments.
ZTE shipped almost 20 million smartphones over the first three quarters with third quarter sales exceeding both Nokia and RIM.
The phenomenal success for Samsung has been the Galaxy S III which is, of course, an Android based device.
Uber a startup that relies on Apple’s iPhones for its drivers to navigate cities and pick up customers seems afraid of Apple Maps and the iOS 6 upgrade.
According to TechCrunch, the transportation startup company recently sent a text message to its fleet of drivers instructing them not to upgrade their smart phones to iOS 6 — at least not for another week.
(It’s not clear why Uber only asked for a week delay; maybe it’s hopeful Apple will work out its kinks quickly).
Uber sent the text after a few of its drivers already downloaded the new software and complained about screwy directions.
A driver who downloaded iOS 6 before Uber’s text spoke of the events after the iOS6 upgrade,saying Apple’s directions led him to the wrong pickup location.
Other Uber drivers are reportedly resorting to Androids while Apple figures out the mess.