Apple’s adds R&D centers in China

Apple released a statement on their Chinese website regarding its plans on building more research hubs in China. The iPhone has been the leading premium mobile phone brand globally up until very recently – when its sales started to slow in China.

Despite being the leader in premium mobile phones Apple has been experiencing trying times in maintaining the loyalty of its Chinese consumers. One study revealed that while the iPhone has secured a rather permanent stand on the international market of premium smartphones, the rise of local smartphone giants like Huawei, Oppo, and Vivo have hindered the brand’s growth in recent months.

 

Shanghai, China

 

Steven Milunovich of UBS provided a report to AppleInsider, proving that the US premium smartphone market returned to growth in 2016’s last quarter at 8% up with Apple outgrowing the market with a 19% growth. Correspondingly, in Europe, the premium market grew 4%, with Apple climbing a sweet 16%.

Apple’s maintains its hold on the Japanese premium smartphone market with a market share of up to 70% in the country, with Sony following suit at 16%, and Samsung greatly behind at only 3%.

Meanwhile, in China, while the market grew 9%, iPhone sales are at a 19% decline. Apple remains the largest vendor in the country, garnering 47% of the market share. Samsung holds 4% of the China market.

A notable point is the revelation that arises due to the Hong Kong and Taiwan markets being separate from the Mainland China market. The fact is, the sales decline in Mainland China itself is just a mere 5%. The vast majority of the decline comes from Hong Kong’s 50% fall.

 

Apple, Beijing, China

 

Apple’s decision to expand research in the country comes at a strategic time, underscoring CEO Tim Cook’s upcoming trip to China, where he is set to speak at a high-profile economic forum in Beijing. The company says it seeks to build new research facilities in Shanghai and Suzhou in addition to their Beijing and Shenzhen centers. The firm also revealed that it will spend at least 3.5 billion yuan, or, $507 million, on the institutions.

These four centers are set to open later this year. The company plans cooperation with local partners and suppliers as well as top educational institutes. This puts Apple in a good place within the China market as a foreign company.

For the longest time, China has been the driver for the iPhone’s astounding growth, going against the current of a diminishing smartphone demand in other regions. This expansion sees Apple rekindling a great love affair with a nation of some of its biggest fans.

 

Apple

AppleInsider

Steve Milunovich, UBS

Tim Cook, Apple