Tim Cook’s Risky Bet Amidst Turmoil in China

At the International Supply Chain Expo in Beijing, Apple's CEO emphasized the significance of Chinese partners, prompting questions about how these collaborations might influence the company's future.

Tim Cook Woos China Despite Falling iPhone Sales

Last Monday, at the “China International Supply Chain Expo” in Beijing, Tim Cook, CEO of Apple, made a significant appearance. His visit underscored the importance of China, the world’s largest smartphone market, to Apple.

A Third Significant Public Visit

This trip marked Tim Cook’s third public appearance in China within a year. Demonstrating deep appreciation for Chinese partners, he stated during an online interview: “We couldn’t do what we do without them”. This tribute comes amidst stagnant iPhone sales and uncertainty over the launch of Apple’s AI system in China.

Towards Production Diversification

The visit highlighted the significance of the Chinese market for Apple, despite a strategy to diversify its production chain to mitigate geopolitical risks. However, fierce domestic competition has eroded iPhone sales in the region. While local competitors like Xiaomi and Huawei are integrating AI software into their devices, Apple is still awaiting approval from Chinese regulators to launch its own AI services.

A Challenging Competitive Context

Despite the global popularity of the iPhone 16 Pro, Apple’s smartphone sales saw a double-digit decline in China during this year’s Singles’ Day, according to research firm Counterpoint. In contrast, Huawei’s phone sales increased by 7% during the world’s largest online shopping event.

With a 7.7% year-on-year drop in Apple’s revenues in the Greater China market (including mainland China, Hong Kong, Macao, and Taiwan), Tim Cook charmed his way during his March visit to Shanghai, where he met with local video game developers, a filmmaker, and the billionaire founder of electric vehicle maker BYD.