Main article: Apple
2024: iPhone sales in China collapse 19% in first three months
In January 2024, Apple is forced to offer discounts on its iPhones in China, reducing retail prices by as much as 500 yuan ($70) amid growing competition in the world's largest smartphone market.
iPhone sales in China declined 24% in the first 6 weeks of 2024, pushing Apple Inc. to 4th among smartphone manufacturers in that country.
Huawei climbed to 2nd place in sales with 64% growth.
As a result, iPhone sales in China fell 19% in the March quarter, according to an independent research company, which was the worst indicator for the gadget since the onset of Covid-19 in 2020.
The company continues to cede market share to local competitors such as. Huawei
2023
Revenue reduction of 13% in Q4
Apple's decline in sales in China raises concerns that the market valuable to the company is at risk.
Revenue in China fell 13% in Q4 2023, the strongest decline since the 2018 holiday season. The downturn darkens otherwise strong quarterly results.
Chinese officials banned from using iPhone
On September 6, 2023, it became known that the Chinese authorities banned employees of central government agencies from using Apple iPhones and devices of other foreign brands for work purposes. Moreover, such gadgets to officials cannot even be brought with them to office premises.
According to The Wall Street Journal, the ban is being introduced amid growing tensions between China and the United States. Which manufacturers of smartphones and computer equipment (in addition to Apple) were blacklisted is not specified. The initiative is aimed at reducing the PRC's dependence on foreign technologies, as well as stimulating the transition to its own developments, including in the field of software and hardware solutions. It is assumed that this will improve the security situation and prevent data leaks through imported equipment.
Earlier, the Chinese authorities have already imposed restrictions on the use of iPhones in certain departments, but now the action of this measure has been expanded. Officials receive notices banning the use of smartphones of foreign brands in workplaces through corporate chats. In addition, employees are informed about the new rules by their immediate supervisors at meetings.
Experts say the ban could seriously hit the business of foreign manufacturers of cellular devices and computer equipment in the Chinese market. For example, the PRC provides approximately 19% of Apple's total revenue. Moreover, this company holds a leading position in China in the premium smartphone segment. The adopted rules can lead to the fact that the demand for iPhones in the local market will decrease significantly. Apple itself does not comment on the situation by early September 2023.[1]
2022
Apple limits AirDrop wireless file sharing feature on iPhone in China after using it in protests
In the latest version - iOS 16.1.1, released on November 9, 2022 - a window during which users can receive files from other users is limited to 10 minutes. Previous options did not limit the time, users could choose to receive files from everyone, from no one or only from their contacts.
Apple limited the AirDrop feature after the mechanism was used by protesters to distribute images to other iPhone owners.
Apple has not commented on why the change was introduced in China, but said it plans to roll out the new AirDrop setup worldwide next year. The idea is to reduce unwanted file sharing, the company said.
Former Apple engineer admits stealing drawings for the company's self-driving car before moving to work with a Chinese manufacturer
A former Apple engineer has admitted stealing blueprints for the company's self-driving car before switching to work for a Chinese rival. This outcome in the case, which began back in 2018, became known in August 2022. Read more here.
Start moving production from China to India and Vietnam
By August 2022, Apple began working with suppliers from India to move capacity out of China. The first iPhones 14 will be produced in India in late October or November 2022. Earlier it was reported about negotiations on the start of production of Apple Watch and MacBook in Vietnam.
US to ban Apple and Google from hosting pay-in-yuan apps
The US will ban Apple and Google from hosting pay-in-yuan apps. This became known on May 27, 2022. Read more here.
2021: Map of Apple's manufacturing sites. 98% of devices are made in China
2019: Huawei chief stands up for Apple, asks not to block Huawei China business
At the end of May 2019, the founder and de facto head of Huawei, Ren Zhengfei, supported Apple, saying that restrictive measures by the Chinese government against the American corporation were wrong. Read more here.
2018: China spied on Apple and Amazon via chips in hardware
In early October 2018, it became known that China spied on Apple, Amazon and other technology companies by installing special chips in equipment used in data centers. These chips could be installed by Super Micro. Read more here.
2017: Construction of the first data center in China
On July 12, 2017, Apple announced the construction of its first data center in China to follow local cybersecurity laws, Reuters news agency reported.
The data center will be built in Guizhou Province in conjunction with local Internet service provider Guizhou-Cloud Big Data Industry (GCBD). This project will be part of a $1 billion investment planned by Apple to develop business in this Chinese province, an Apple spokesman told the publication.
 | The creation of this data center will allow us to increase the speed and reliability of our products and services, as well as bring the company's activities in line with the new legislation. The rules require cloud services to be managed by Chinese companies, so we are partnering with GCBD to offer iCloud, Apple said in a statement. |  |
On June 1, 2017, a law came into force in China prohibiting foreign companies from storing personal data of citizens outside the country. Apple became the first foreign company to announce a change in the approach to storing information in the Celestial Empire after the start of the new information security law, which a number of foreign business representatives considered ambiguous and threatening leakage of confidential data. In turn, the Chinese authorities say that the law is designed not to disadvantage companies, but in response to the threat of cyber attacks and terrorism.
Apple says the company has strong personal data protection and security, and no backdoors will be created in any of the systems.
Close cooperation with Chinese authorities is critical to Apple's business development in the country, Bloomberg reported. Previously, the California giant enjoyed preferences in the PRC market, but in 2016, under pressure from regulators, it was forced to close some services in China, and also lost exclusive rights to use the iPhone brand. [2]
Earlier, leading cloud providers, including Amazon and Microsoft, launched data centers in China[3].
2016
Plan to open the first research center in China
American Apple Inc. plans to open the first research center in China in 2016, hoping to support its position in the PRC market, where the company's sales are weakening, the Financial Times newspaper writes.
Apple Chief Executive Officer Tim Cook promised to increase investment in the country and, in particular, create an R&D center during a meeting with Deputy Prime Minister of the State Council of the People's Republic of China Zhang Gaoli earlier this week.
Apple's research center in China will bring together both the company's engineers already working in the country and new employees. The staff of the Chinese division of Apple includes 9 thousand people, and about half of them work in 42 retail sales centers. Over the past four years, Apple has doubled the number of branches in the PRC to 45 offices.
In2016, the PRC authorities blocked Chinese users from accessing Apple services - iTunes and iBooks as part of general measures to restrict foreign content.
Deal with the Chinese authorities on investments of $275 billion over 5 years
In December 2021, it became known that Apple CEO Tim Cook was negotiating with Chinese state regulators, which paved the way for the company's investments of at least $275 billion over 5 years. The deal was agreed in 2016.
The Information reported on an agreement that Tim Cook concluded with the Chinese government and which allowed Apple to expand most of its operations in the country. In the agreement, which was not made public, the company promised it would contribute to China's economy and technological breakthrough through investment, business deals and training of new workers. The agreement came in part because some regulators in China believed Apple was making insufficient contributions to the local economy, the report said.
While it's unclear how much of Apple's $275 billion in operating costs for R&D, manufacturing, customer support and logistics in the country, the figure recalls how big operations the company manages. For example, in 2020, Apple spent almost $22 billion on research work around the world and almost $44 billion on operating costs. The company said most of the growth in those costs was related to staff pay.
Apple relies heavily on China for its business. Many parts for iPhones, iPads and Mac computers are made in China. The company also relies heavily on contract manufacturers in China, such as Foxconn, to assemble its products. At the same time, Chinese buyers are Apple's third largest geographical market, which in 2020 amounted to $68 billion, or almost 19% of Apple's annual sales.
For that reason, investors have closely followed Apple's relationship with the Chinese government over the years. The publication says Apple has reduced privacy protections for Chinese iPhone, iPad and Mac owners to ensure it can continue to operate in China. The company also talked about efforts to train low-paid workers in the country, as well as investments, for example, in the Chinese company Didi Chuxing, which provides passenger transportation services. Some of the moves are an attempt to show China officials their relevance, the Information report said.[4]
See also
Notes
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