Recently, some media reported that Apple CEO Tim Cook was sued for comments about China's iPhone demand. At present, the case has been qualified as a class action lawsuit. It is reported that the lawsuit is led by the Norfolk County Council, the governing body of the Norfolk Pension Fund, which is responsible for operating billions of pounds of Norfolk pensions.
As of now, Apple has not officially responded to the matter.
The lawsuit stems from Apple's November 2018 earnings call, when Cook said Apple was seeing sales pressure in some markets, but "I wouldn't put China in that category." ”
Apple CEO Tim Cook
The news reassured shareholders because China is Apple's main market.
However, two months later, in January 2019, Apple issued a major profit warning calling the Chinese market weak, the first time Apple had lowered its sales forecast since 2002, and the stock price fell by 8%. Shareholders, including Norfolk, believe it was too late to lower expectations and that Apple should have foreseen the problem, accusing Apple of concealing the fact that demand was falling.
Norfolk County Council, which manages billions of pounds of Norfolk pensions, argues that Cook's earlier remarks misled shareholders by concealing the fact that demand has slowed. The fund said it lost nearly $1 million to Cook's remarks when it sued Apple in 2020.
In November 2020, the court notified plaintiffs that shareholders could file a class action lawsuit over Apple's concealment of declining sales demand. The application was finally approved.
Judge Yvonne Gonzalez-Rogers said Apple's views on the incident were "distorted facts."
The class action lawsuit, which means other shareholders can also join the case, lowers the standard of proof required by claimants and may improve the chances of payment. Under the "rely-unsubscribe" principle of a class action lawsuit, Parliament does not need to prove that it made the deal based on Cook's remarks.
Apple said Cook's comments were only statements of opinion and were protected. The statement "failed to defend against any actionable false or misleading statement".
Nandu reporter noted that in November 2018, because of the weak market, Apple's stock price fell by up to 21%, and the stock price fell below $40, but as sales rebounded, the stock price gradually fell at the end of the year, and the stock price rose by 90% in 2019, nearly doubling. As of the close of trading on Feb. 11 of this year, Apple's stock price has grown to $168.
Apple's second quarter (January-March) report of fiscal 2021 shows that net revenue was $89.58 billion, of which Greater China revenue was $17.73 billion, an increase of 87% year-on-year, much higher than the average growth rate.
On January 27, Apple announced the first fiscal quarter of fiscal 2022, in the fourth quarter of 2021 (October-December), Apple's revenue increased by 11% year-on-year to $123.9 billion, a record high; net profit climbed from $28.76 billion in the same period last year to $34.63 billion, and the single-quarter profit exceeded $30 billion for the first time, an increase of 20%. Revenue in Greater China was US$25.783 billion, up 21% compared to the same period last year.
The quarter's growth was mainly due to the hot sales of the iPhone 13. According to the China Smartphone Weekly Released by Counterpoint Research on January 14, the iPhone 13 has won the domestic mobile phone sales championship for six consecutive weeks, of which the iPhone 13 accounts for half of the overall sales. Industry analysts believe that Apple's fiscal second quarter is expected to continue to break records.
Counterpoint pointed out that Apple was able to maintain its sales advantage, mainly because the iPhone 13 China order was cheaper than the previous generation of the iPhone 12, coupled with the decline in Huawei's high-end market shipments, so it was difficult to shake Apple's position in the high-end market before other domestic model brands and quality did not catch up.
Written by: Nandu reporter Kong Xueshao Intern Cao Ziyi