Bad Press Doesn’t Hurt Apple’s Sales

Bad Press Doesn’t Hurt Apple’s Sales

They say there’s no such thing as bad publicity. Usually, we think that’s just a phrase used to comfort someone who’s receiving bad publicity at the moment. What we normally expect to happen when there’s negative reporting about a company in the press is that the company suffers a dip in sales or begins to lose consumer confidence. If you want to see that theory in action, just take a look at what happened to Mike Lindell’s MyPillow company in America after Lindell voiced support for some of the wildest conspiracy theories concerning Donald Trump and the election he lost.

Using the same logic, if there’s any company in the world that should be feeling the impact of bad publicity at the moment, it’s Apple. The juggernaut American company has been beaten from pillar to post about its App Store policies, with everybody from Epic Games to Spotify and the European Union filing lawsuits against them. The bone of contention is the substantial cut of profits that Apple takes from every app listed on its store and the fact that it refuses to allow apps to be downloaded onto its products and hardware any other way. If you want a new app on your iPhone or iPad, you have to download it from the App Store. If you’re a developer and you want to make an iPhone app, it’s the App Store and its terms and conditions or nothing at all. That, in a lot of people’s eyes, is the definition of a monopoly.

Apple, of course, disagrees. We’ll soon find out who’s wrong and who’s right because the first Apple antitrust lawsuit is due to be heard in American courts during May. The prosecution compares Apple’s policies to the policies of an online slots website. That might sound like a bizarre comparison to make, but it holds water. If you or your company made online slots, you have literally hundreds of websites in the world to choose from when it comes to uploading them and making money. If you didn’t like the terms on offer from one site, you’d be free to head to somewhere else negotiate with them instead, that’s why review sites like sistersite.co.uk are so important. The online casino marketplace might be an enormous capitalist enterprise, but it’s a level playing field. Apple’s critics feel that the company denies this same freedom to app developers, and they haven’t been quiet about saying so.

Every lawsuit filed against Apple creates a storm of bad publicity. Even when the company isn’t being sued, it’s being mocked. Anti-Apple propaganda has turned up in almost every game made by Epic Games, and shots have been fired relentlessly on social media. The entire world of technology and entertainment almost feels like it’s lining up to point at Apple and say, “they’re doing bad things.” What we’d normally expect to see because of this is a drop in revenue for Apple. A company under such heavy fire should be selling less hardware and showing contrition in an attempt to win back its audience. Apple isn’t like most companies, though. The tone of Apple’s management has remained defiant, and Apple’s sales figures have remained robust. In fact, they’re more than robust. Apple hardware is flying off the shelves.

While the Western world and the European Union queue up to take Apple to court, China has remained indifferent about its corporate practices. If anything, the reverse has happened. Apple-mania has swept China, and Chinese customers are buying more goods from the technology company than ever before. China is, of course, a gigantic market. The net result of these additional Chinese sales, plus a Wall Street-defying resilience on sales in the rest of the world, is that Apple has doubled its profits since the beginning of the 2020 pandemic. During the first three months of 2021, Apple recorded revenues of $89.6bn. That’s actually more than double the first three months of 2020. Profits from that revenue came in at $23.6bn. For the same period of 2020, Apple recorded profits of $11.3bn. The company might have some enormously expensive lawsuits coming its way, but it’s never had more money to fight them with.

While sales of almost all Apple products are up, it’s the strength of iPhone sales that are responsible for the bulk of the profits. Part of this might even be related to the pandemic itself, which seems to have benefited Apple rather than hindered it. With more people working and communicating from home than ever before, it seems the global public has chosen Apple machinery to do that work and communication with. While Wall Street was expecting a minor sales boost, the figures posted by the company have blown those expectations out of the water. Apple’s share price is booming at the time of writing and should remain buoyant for some time. It’s thought that customers worldwide are preparing for the 5G era by buying 5G-compliant phones, and Apple is more than happy to satisfy the demand. The trend is expected to continue well into 2021, and some Wall Street analysts now believe that the second quarter of the year might also break records.

What this tells us is that some companies might be so big or so important that they’re immune to criticism. Apple’s opponents can and will find sticks to beat the company with and take advantage of any opportunity that presents itself, but at the moment, it seems like they can’t make a tent in the leviathan that Apple has become. That may change if one or more of the court cases doesn’t go Apple’s way because the results might be large fines or enforced changes in the way that Apple does business, but for now, Apple executives and shareholders have something to celebrate. After a year of one bad news story after another, this must come as a welcome relief to them. It’s also a vote of confidence from consumers, who apparently don’t care about Apple’s App Store practices or anything else so long as they continue to manufacture high-quality electronics. Apple should be emboldened by this and will likely behave accordingly in the courtroom.

John Norwood
John Norwood is best known as a technology journalist, currently at Ziddu where he focuses on tech startups, companies, and products.