China MediaExpress Holdings, Inc. (fka CCME)

[redman_2014]

The AAPL vs. SWITOW argument

I posted this last night, but I wanted to mention it again because I think it makes the Apple argument a non-issue completely.

Muddy Waters report states that there is no way Switow is an online distributor for AAPL because of AAPL's tight distribution policies. My point is Switow explicitly states in it's press release that it is NOT the distributor since the orders pass directly onto the manufacturers(or licensed distributors aka Eading Group). Switow is merely an advertising medium and acts as a conduit for the orders. I liken Switow to a telephone switchboard operator. They may talk to the customer, but order fulfillment is done by others (in this case Eading Group)

'AAPL only has two online distributors in China, one of which is Amazon.com subsidiary Joyo(www.amazon.cn). AAPL does not have any agreement with SWITOW (or CCME). Further it does not permit its China licensees to sub-license. Therefore, CCME is abjectly lying about this agreement.

From the Switow press release:

'SWITOW orders will directly pass to the contracted advertisers who are solely responsible for order fulfillment and bear all inventory risks, as well as all post-sale obligations. A percentage of the sale of the listed items will be earned by SWITOW'

http://ih.advfn.com/p.php?pid=nmona&article=45798891


So none of AAPL's policies even come into play and therefore no legal issues. And management just confirmed the Eading Group contract in their press release last night, and Eading is AAPL's second online distributor next to Amazon, so Muddy Waters got it completely wrong just like everything else that is being proven erroneous in their report.

Please respond if you have a different take on the information provided.


-Adam