Apple Australia Fined $6.6 Million For Bricking iPhones

Australia’s federal court has fined Apple $6.6 million over the bricking of iPhones two years ago. The Australian Competition and Consumer Commission had filed the lawsuit following the smartphone-bricking error which disabled devices which had previously been repaired by 3rd-party firms. About 275 owners of iPhones are estimated to have been affected by the bricking error which is commonly referred to as ‘Error 53’.

After initial reports Apple delayed before preparing a response. In Early 2016 the Cupertino, California-based tech giant put out a statement which heaped the blame on repairs. At the time customers were not offered any relief by the iPhone maker though following an outcry Apple went on an apology tour as it offered to reimburse customers for the repair costs that they had incurred. Apple also issued a software update which got rid of the problem.

Australian Competition & Consumer Commission

The Australian Competition & Consumer Commission was not entirely satisfied though as the body filed a lawsuit on behalf of owners of iPhones in Australia who had been turned away by Apple from as early as February 2015. According to the Australian Competition & Consumer Commission Apple changed its policy after being contacted by the consumer body about an investigation.

This comes in the wake of reports indicating that amongst the big technology firms in the United States Apple is the most heavily exposed to a trade war between China and the United States. Earlier in the week the Trump administration made a threat of imposing tariffs on Chinese goods worth approximately $200 billion. China’s commerce ministry on the other hand promised to retaliate if the tariffs were enacted. Late last week tariffs of 25% had been imposed on Chinese goods worth $50 billion and this included semiconductors.

Greater China

According to Mirabaud Securities’ Neil Campling Apple is heavily exposed as during the last fiscal year the tech giant generated close to 20% of its sales from Greater China. This was about $44.7 billion after shipping 41 million iPhones into the world’s second biggest economy. Apple is heavily reliant on Asian suppliers and its iPhones are for instance assembled by Foxconn in China. To mitigate against potential disruptions if trade tensions between China and the United States escalate Apple is reported to have stockpiled on components.

“It is a defensive/protective measure in case there are difficulties in future procurement or supply chain disruption as Apple is potentially in the crossfire of the U.S./Sino trade war,” wrote Campling in a client note.


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