Apple’s Tim Cook goes on China charm offensive amid slowing iPhone sales

Apple’s Tim Cook goes on China charm offensive amid slowing iPhone sales - Business and Finance - News

Apple’s CEO Tim Cook Deepens Apple’s Commitment to China with a New Flagship Store and Expanded Research Center

Apple CEO Tim Cook is making a significant visit to Shanghai as part of the grand opening of an impressive new flagship store. The $11.6 million retail space, located in the central district of Jing’an, marks Apple’s biggest store in China and the second largest globally. With declining sales, Apple is intensifying its presence in this crucial international market and strengthening its supply chain connections.

Cook’s visit comes as Apple faces competition and revenue headwinds. Shanghai, the financial hub of mainland China, now boasts eight Apple stores – the most extensive presence in any city in the country, with 47 stores across 24 cities.

In recent years, Apple has made impressive strides in China’s smartphone market. In 2023, the company grabbed the number one position with an unprecedented 17.3% market share, according to IDC Research. However, sales faltered in early 2024, with a 24% decline compared to the previous year. This dip caused Apple’s market share to slide behind that of Vivo, Huawei, and Honor during this period while Huawei’s sales saw a noteworthy 64% surge.

Despite these challenges, Cook’s visit to Shanghai underscores China’s crucial role as both Apple’s biggest overseas market and an integral part of its manufacturing supply chain. Ivan Lam, senior analyst at Counterpoint, explains:

“China remains a critical market for Apple, particularly in the premium segment above $800, where it holds a dominant position. With Huawei’s resurgence and other Chinese brands gaining traction in offline sales, Apple is proactively strengthening its offline presence, leveraging flagship stores as a key tool to promote high-end smartphones.”

To bolster its strategy in China, Apple announced plans to expand its research center in Shanghai and unveil a new applied research lab in Shenzhen later this year. According to Daniel Ives, managing director and senior equity analyst at Wedbush Securities:

“China is the heart and lungs of Apple’s growth strategy as Cupertino doubles down on its China strategy with these moves.”

During his visit, Cook held an information-sharing session with three of Apple’s Chinese suppliers – BYD, Lens Technology, and Everwin Precision Technology. In a video shared on his Weibo account, Cook can be seen meeting with Wang Chuanfu, founder and chairman of BYD, the world’s largest electric vehicle maker. Cook praised these Chinese suppliers for their advanced manufacturing capabilities and emphasized their significance to Apple:

“There’s no supply chain in the world more critical to Apple than that of China.”

Throughout his visit, Cook also engaged with local film production studios, mobile game developers, and the crowd of excited shoppers and staff. Both Dolores, a movie producer in Beijing who has been using Apple products for years, and Wei, a Beijing resident planning to visit the new store, shared their loyalty to the brand:

“I’ll go and kinda ‘worship’ the store,” Dolores said. “It should be about mutual achievement for Apple and Chinese brands, rather than hostility.”

“For international products, if you like a brand, there should be no geopolitical divisions,” Wei added. “Just look at the products.”

Apple continues to have a dedicated fanbase in China, with many enthusiasts eagerly waiting for Cook’s arrival. Over a hundred shoppers gathered overnight to be among the first to enter the new store or snap a photo with Cook, while others expressed their plans to visit.