Over the past few months, Apple (NASDAQ:AAPL) has been taking body blows on public relations, but Cupertino is finally fighting back. In response to the story that a Chinese woman was electrocuted while recharging her iPhone, the company has rolled out the USB Power Adapter Takeback Program. The program is one of the most deft moves made by Apple in recent memory, and even has the potential to boost the bottom line.
Since late June, when shares dipped below $400 per share, the stock has looked strong. Some wins heading into the expected releases this fall should give shares some good momentum.
Apple has been hit by a series of negative news events for several months now. Most recent was a report from research firm IDC earlier this week that showed that Apple's iOS has given up additional market share to Google's Android operating system. That adds to the Chinese report and the story reported by the Financial Times on delays with the rumored iWatch leading to a hiring rush. Still, even as Apple addresses these issues and the Android vs. iOS battle rages on, the outlook is positive. IDC's Ramon Llamas believes that "with a new iPhone and revamped iOS coming out later this year, Apple is well-positioned to recapture market share."
Under the USB Power Adapter Takeback Program, from August 16 to October 18, Apple will offer an Apple-branded USB charger for $10 when you turn in at least one after-market charger and bring in your iPhone, iPad, or iPod for serial number validation. This represents a roughly 50% discount on the chargers, but is limited to one charger per device that you own. While Apple's products are of higher quality, it is still likely that the company will be making some profit, even at the $10 price point.
A master stroke
Apple's approach to the Chinese tragedy has been nothing short of masterful. By offering the program, it is signaling to the world that its chargers are the absolute gold standard as well as helping to justify the relative higher prices at which these accessories are sold. This should accomplish the PR objective of deferring any criticism the company might have received over the Chinese incident and helping it to look proactive.
The secondary benefit that Apple is likely to receive from the program is to create additional foot traffic in its stores. When you go into an Apple store to trade in your charger, you are giving the company a chance to sell you additional products. Maybe you'll be drawn to a new case, or maybe the Apple Genius will convince you it's time for a new iPhone, iPad, or MacBook. This should also clear the way for a cleaner image heading into the next series of product releases.
The way forward
After crossing the $700-per-share level last fall, Apple saw a precipitous fall in its share price, driven largely by negative news events, most of which were handled poorly. While the USB Power Adapter Takeback Program may seem like a minor step in the overall framework of the Apple empire, I hope it represents a shift in attitude and a gathering momentum that will be realized this fall. The stock has been showing signs of life over the past month, and if Apple can find its stride again, the stock continues to have great upside.