A state-owned newspaper has cited Tim Cook praising China as a production hub, during the CEO’s visit to the country for a new store opening.
Cook’s remarks were made after Apple reported a 13% decline in revenue from China, with a recent market intelligence estimate suggesting that iPhone sales were down 24% in the opening weeks of this year …
Tim Cook praises China
The Financial Times reports that Cook also promised to invest more in China, though with no specific figure given.
The state-owned Global Times, best known for its nationalist bashing of the US, reported the increased investment pledge and quoted Cook as saying: “There’s no supply chain in the world that’s more critical to us than China.”
Shanghai state-owned media noted Cook praised the “high level of modernisation in Chinese factories, with very advanced manufacturing capabilities and well-trained workers”
Apple did specifically announce a new research lab in the country last week, ahead of Cook’s visit.
The US company will […] establish a new applied research lab in Shenzhen, Guangdong province, providing stronger support for employees in the region and deepening collaboration with local suppliers.
Apple’s triple challenge in China
Apple is currently facing three distinct challenges in China.
First, a difficult economy in the country, which has seen unusually large discounts offered to try to offset reduced demand.
Second, a poor political relationship between the US and China has seen the government there discouraging its citizens from buying iPhones.
Third, Huawei’s surprise re-emergence as a competitor to iPhone. The Chinese company’s lead over Apple peaked in 2020, when the US imposed tech sanctions on China. These blocked the export of 5G chips from the US to China. Given that 5G capabilities was by then a must-have for any premium phone, Huawei’s sales fell off a cliff.
But Huawei last year launched the hugely successful Mate 60, a premium phone with a 5G chip made by a Chinese company – something tech experts had considered impossible in the time timescale. This was such a surprising development that it was even raised by the US National Security Advisor during a White House press briefing.
9to5Mac’s take
The reality is that Apple is doing everything in its power to reduce the company’s dependence on China, with India its key focus. But with an estimated 80% of the world’s iPhone supply made at one mega-plant in China, the Cupertino company is currently entirely dependent on production there – which means maintaining a good relationship with the Chinese Communist Party.
It’s not the first time that Cook has been obliged to say nice things about China to keep things sweet, and it won’t be the last.
Photo by Claire Chang on Unsplash
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