Apple pays $490 million to settle investor lawsuit over Tim Cook's China iPhone demand comments

Apple has agreed to pay a whopping $490 million to bring an end to a class action lawsuit that was led by a UK local council over the way its CEO Tim Cook described the demand for iPhones in a key market. It was argued that Cook misled investors by suggesting that demand was stronger than it really was and as a result. the UK's Norfolk County Council lost money.

The council had invested money as part of a pension fund that it administered and in a statement reported by the BBC it said that it would, where warranted, take decisive action to recover losses when pension holders are harmed by what it deemed fraud.

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That fraud came about after an investor call on November 1 2018 when it was noted that there was so-called "sales pressure" in some countries. However, Cook reportedly told investors that he "would not put China in that category," a comment that seems to have been enough to convince investors like Norfolk County Council to buy shares in Apple. However, things soon proved to not be quite the way Cook had suggested that they were.

The BBC notes that just months later, on February 2 2019, Apple downgraded its quarterly revenue forecast while noting that tensions between China and the United States were to blame. The revelation caused a steep drop in the value of Apple shares which in turn meant that investors lost money if they had bought their shares at the higher value on the back of Cook's comments.

It was also reported that Apple had halted production lines for the recently-released iPhone XR, seemingly due to lower-than-expected demand for the budget-friendly handset. The BBC report notes that the original lawsuit was first filed by the US city of Roseville before Norfolk Council took over the role as lead plaintiff in 2020. Apple predictably disagreed with the lawsuit and sought to defend itself with a trial planned for later this year. That will no longer happen of course, with Apple having now agreed to hand over the $490 million in order to settle proceedings. However, it's important to note that the settlement will still need to be approved by a judge before it can be ruled as official.

China is an important market for Apple and one that it continues to try to expand to this day. The sales of iPhones in general have been unpredictable while the overall smartphone market's incessant growth has slowed in recent years as a whole.