BEIJING: Apple Inc Chief Executive Officer Tim Cook arrived in China on Wednesday (March 20) touting the country’s importance as a market and production base, reaching out to Chinese consumers who may be souring on the maker of iPhones.
There’s no supply chain in the world more critical to the company than China’s, Cook told the Global Times in an interview tweeted by the newspaper. Apple’s been expanding its base in the country and increasing investment over the past 30 years, he added.
Cook’s comments, ahead of Thursday’s launch of Apple’s eighth store in Shanghai, come as the “symbiotic” relationship between the company and China as he once described is showing signs of fraying.
Anchored by Foxconn, or Hon Hai Precision Industry Co, Apple’s manufacturing presence in China has been broad and unshakable for over two decades. But the company has suffered snags in production in recent years due to a US and China trade war and Covid-triggered factory closures, delaying launches of products.
Apple is now diversifying its operations away from China by working with assembly and component manufacturing partners in India, Thailand, Malaysia and elsewhere.
Demand for its products in China is also cooling.
Phone sales plunged 24% over the first six weeks of this year, according to research firm Counterpoint. Apple has been losing market share to US-sanctioned Huawei Technologies Co., which has benefited from a wave of patriotic buying for its homegrown Mate 60 Pro devices.
The upcoming Shanghai store adds to Apple’s biggest retail network outside the US and is part of a broader effort to grow and revitalise the company’s brick-and-mortar outlets. China remains a vital market for the company with the world’s largest smartphone consumer base and potential for growing sales of accessories like the Apple Watch.
Apple’s apparent vote of confidence for China is no less important to Xi Jinping’s government. With the economy slowing, new foreign direct investment falling and multinationals looking to other markets for growth, it’s important to show the world China is still open for business in the wake of regulatory crackdowns and national security concerns that have spooked foreign investors.
Cook posted a video of himself on walking around Shanghai with Chinese actor Zheng Kai. In a Weibo clip seen by half a million people within minutes of posting, Cook crossed a bridge near the historic Bund, sampled soup dumplings in a local restaurant and said “hello” in the Shanghainese dialect.
Born and raised in Shanghai, Zheng is one of China’s most famous TV and movie stars. He recently starred in Blossoms Shanghai, a TV show aired on Tencent Holdings Ltd.’s video streaming service. – Bloomberg
