Commentary on Political Economy

Thursday 21 March 2024



Apple chief sings China’s praises with talk of ‘crit­ical’ sup­ply role

Apple chief Tim Cook has said that China is “crit­ical” to its busi­ness in com­ments made dur­ing a visit to the coun­try, where con­sumers are show­ing signs of sour­ing on the com­pany’s iPhones and US tech­no­logy.

Amid rising geo­pol­it­ical ten­sions, Cook has become a fre­quent vis­itor to China, a vital mar­ket and man­u­fac­tur­ing base for Apple products.

His latest pub­lic rela­tions offens­ive began in Shang­hai with an inter­view in which he delivered effus­ive praise and a prom­ise to invest more in the coun­try.

The Global Times, known for bash­ing the US, repor­ted the invest­ment pledge and quoted Cook as say­ing: “There’s no sup­ply chain in the world that’s more crit­ical to us than China.”

Shang­hai media noted that Cook praised the “high level of mod­ern­isa­tion in Chinese factor­ies, with very advanced man­u­fac­tur­ing cap­ab­il­it­ies and well­trained work­ers”.

Cook told media that Apple would need the coun­try’s help to make all its products car­bon-neut­ral by 2030 and it was invest­ing heav­ily in gen­er­at­ive AI.

Cook’s visit comes amid tum­bling sales in China, which con­trib­uted $21bn to Apple’s top line in the fourth quarter, or 17 per cent of sales. The fig­ure rep­res­en­ted a 13 per cent year-on-year decline, and research group Coun­ter­point said iPhone sales in the first six weeks of this year were down 24 per cent from a year earlier.

The com­pany has been hit by a top­down cam­paign to cut iPhone usage among Chinese state employ­ees and the return of Hua­wei, which last year over­came US sanc­tions to roll out a homegrown phone cap­able of near-5G speeds.

This month a dozen del­eg­ates to China’s top polit­ical gath­er­ing said they were using domestic brand phones, with sev­eral alleging that iPhones could spy on them.

Cook and Apple have been keen to turn around the nar­rat­ive. The group announced last week that it was upgrad­ing its Shang­hai research centre and open­ing a lab in Shen­zhen to work on research and test­ing for its iPhone, iPad and Vis­ion Pro lines, while deep­en­ing co-oper­a­tion with China sup­pli­ers.

Apple said the projects would build on the more than Rmb1bn ($140mn) it had inves­ted in applied research labs in China. Local head Isa­bel Ge Mahe said the com­pany was “proud to deepen our roots in China and expand our world­class facil­it­ies here”.

On Wed­nes­day, Cook met Apple’s China sup­pli­ers, includ­ing the head of car­maker BYD and exec­ut­ives from Lens Tech­no­logy and Changy­ing Pre­ci­sion Tech­no­logy. He strolled in Shang­hai’s water­front, writ­ing in a post on Weibo: “I’m always so happy to be back in this remark­able city.”

He was expec­ted to open Apple’s eighth retail store in Shang­hai yes­ter­day and attend the China Devel­op­ment Forum, which starts over the week­end.

Zheng Wei, 61, was among the crowd and said he had bought his first Apple product a dec­ade ago. “There haven’t been huge func­tion­al­ity advances over this past dec­ade, but once you’re in this eco­sys­tem, it’s hard to leave,” he said.

“Apple’s devel­op­ment pro­spects in China don’t look good. The eco­nomy is bad and they are often made out to be the enemy in the media.”

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