Apple has announced that it will boost its investment in China, one of its largest but increasingly challenging markets, and build its first Asia-Pacific research and development center in the country.
Chief Executive Tim Cook made the pledge during a trip to China, at least his second in four months, as demand for Apple’s iPhones has plummeted in the world’s second-largest economy and the government remains wary about foreign technology.
Research centres are one of the ways that Western outfits get onside with the Chinese government. Cook said the center will unite Apple’s engineering and operations teams in China and is also intended to deepen the company’s ties to partners and universities.
Sales in Greater China, once touted as Apple’s next growth engine, decreased by one-third in its fiscal third quarter, after having more than doubled a year earlier. The results did not include inventory drawdowns as retailers sold phones in stock faster than new supply coming from Apple, meaning that demand was not as weak as it seemed.
China’s slowing economy is stocking concerns about Apple’s prospects there. The company’s online stores for iBooks and movies closed in the country after Beijing in March imposed strict curbs on online publishing, particularly for foreign firms.
Apple has lost intellectual property battles in China and faces anti-U.S. sentiment from consumers there.
In May, Apple announced a $1 billion deal with taxi outfit Didi Chuxing, a move many experts saw as an attempt to curry favor with Beijing