Chinese Government Shuts Down Apple Online Services: Report

By Todd R. Weiss  |  Posted 2016-04-22 Print this article Print
Apple, China, iBooks Store, iTunes Movies, revenue, Chinese regulators, smartphones

The iBooks and iTunes Movies stores that opened six months ago were suddenly shut down by Chinese regulators last week. 

Government regulators in China without warning shut down Apple's online iBooks Store and iTunes Movies service, which had opened about six months ago, leaving Apple working with the communist government to try to restart the services.

The shuttering of the Apple services occurred last week and came despite permission that Apple was previously granted by the government when the services began there last year, according to an April 21 story by The New York Times.

China's State Administration of Press, Publication, Radio, Film and Television halted the services, asserting its authority and demanding the closings, the Times reported, based on anonymous reports from two people who were familiar with the matter.

Apple has been garnering more and more of its revenue from China the last several years, according to the company's revenue reports. In January, Apple reported $18.37 billion in revenue from China in its first quarter of 2016, which made up about 24.2 percent of the company's $75.87 billion in revenue for the quarter. In the fourth quarter of 2015, Apple reported $12.52 billion in revenue from China, out of a total of $51.5 billion, according to earlier eWEEK reports.

China is Apple's second-largest global market behind the United States.

Apple in a statement said that the company hopes to "make books and movies available again to our customers in China as soon as possible."

Apple recently even launched its Apple Pay mobile payment services in China as it works to find new customers in a world that is experiencing a slowdown in new smartphone sales and shipments due to decreasing demand for new devices. Many smartphone vendors, including Samsung, have been experiencing the same trend as consumers appear to be satisfied with the devices and features they already have for their use.

Apple will report its second-quarter fiscal 2016 financial numbers on April 26, one day later than originally scheduled due to the recent death of former Apple executive Bill Campbell.

"China's pushback against Apple shows that the company may finally be vulnerable to the heightened scrutiny that other American tech companies have faced in recent years," the Times reported. "That scrutiny was spurred by revelations from the former United States National Security Agency contractor Edward J. Snowden in 2013 of the use of American companies to conduct cyberespionage for Washington."

Last May, Apple moved to make its operations in China more environmentally friendly by starting initiatives that will expand existing renewable energy projects for its manufacturing facilities and will create a new forestland program that will protect as many as 1 million acres of responsibly managed working forests that provide fiber for pulp, paper and wood products. That effort, according to an earlier eWEEK story, is part of Apple's goal of reducing its environmental and energy impacts around the world.

In April 2015, Apple had announced its first major solar project in China to power all of the company's corporate offices and retail stores. For that project, Apple is partnering with Leshan Electric Power, Sichuan Development Holding Co., Tianjin Tsinlien Investment Holding Co., Tianjin Zhonghuan Semiconductor and SunPower to create two 20-megawatt solar farms, according to Apple. The project will generate up to 80 million kilowatt hours per year of clean energy, enough to power the equivalent of 61,000 Chinese homes. 


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