Apple is enlarging its applied research in China, as iPhone sales slow in the country amid increased competition from Huawei Technologies and other major domestic handset vendors. Cupertino, California-based Apple plans to expand its research center in Shanghai to support all of its product lines and open a new lab in the southern tech hub Shenzhen later this year, the company said in a statement. The Shenzhen lab is expected to boost Apple’s testing and research capabilities for its major products, including the iPhone, iPad and Vision Pro headset, according to the company. The new facility will also serve to strengthen the firm’s collaboration with local suppliers, while providing support to all its employees in the region. The mainland forms part of Apple’s Greater China region, which also covers Hong Kong, Taiwan and Macao.
Apple’s Vice President and Managing Director of Greater China, Isabel Ge, said in the statement that the company is “proud” to cultivate deeper ties in China and expand its facilities in the country. “We have already invested CNY1 billion into the existing applied research lab in China,” she told China Daily. Apple’s latest initiative shows that it remains committed to boosting capital spending in Greater China – the firm’s third-largest geographic market behind the Americas and Europe, based on its December quarter results – in spite of market challenges and recent efforts to diversify its manufacturing supply chain outside the mainland.
The company is opening another physical Apple Store on March 21 in Shanghai’s Jing’an district, the city’s central commercial area. Apple’s iPhone sales on the mainland fell 24% year-on-year over the first six weeks of 2024, as total smartphone sales in the market declined by 7% in the same period because of increased competition and muted consumer spending, according to a report by Counterpoint Research. The company “faced stiff competition at the high end of the market from a resurgent Huawei, while getting squeezed in the middle on aggressive pricing by the likes of Oppo, Vivo and Xiaomi”, Counterpoint Senior Analyst Zhang Mengmeng said in the report.
U.S.-sanctioned Huawei, which made a successful comeback last year in China’s premium 5G handset segment, ranked behind Vivo, but ahead of Honor and Apple in mainland smartphone sales during the first six weeks of this year, according to Counterpoint. Apple’s authorized retailers on the mainland were offering steep discounts on the latest iPhone 15 series earlier this month, in a fresh round of promotions to revive sales. The top-of-the-line iPhone 15 Pro Max was selling for CNY8,849 on Alibaba Group Holding’s Tmall platform, while e-commerce rival JD.com offered the handset roughly CNY1,150 cheaper than the original price, the South China Morning Post reports.
Apple has R&D centers in Beijing, Shanghai, Shenzhen and Suzhou, Jiangsu province, and its R&D workforce in China has doubled over the past five years, the China Daily adds. “They play a crucial role in Apple’s product innovation. The investment shows our long-term commitment to the Chinese market, and will inject new vitality into local innovation and supply chain development,” Isabel Ge said. Apple's new store will be its eighth in Shanghai. As a result, it will have 47 stores on the Chinese mainland, second only to the U.S.
