The 20-year connection between Apple and China: A tale of success

Apple’s CEO, Tim Cook, frequently visits China despite the escalating political tensions. China is not only considered a significant market but also a massive production base. In a recent interview with local media, Tim Cook expressed his admiration for the country’s modernization and manufacturing capabilities. He even proclaimed that “no supply chain in the world is more important to us than China.”

Apple recognizes the need for China’s help in achieving its sustainability goals. Cook revealed that Apple aims to produce all its products with a neutral carbon footprint by 2030. Additionally, the company is heavily investing in artificial intelligence.

Although Apple’s sales have declined in China recently, it has not deterred Tim Cook from strengthening the company’s ties with the country. The rise of Huawei, which managed to overcome US sanctions and launch the innovative “cây nhà lá vườn” smartphone, has contributed to this decline. In an attempt to regain market share, Apple is upgrading its research center in Shanghai and has opened a new lab in Shenzhen for iPhone, iPad, and Vision Pro product research and development. Apple also collaborates with Chinese suppliers to enhance its presence in the region.

The investment in these projects totals over 1 billion RMB ($140 million), which Apple has allocated to its Chinese research labs. During his visit, Tim Cook met with several Apple suppliers in China, including the heads of BYD, Lens Technology, and Changying Precision Technology.

Expressing his excitement, Cook wrote on the Chinese social media platform Weibo, “I am delighted to be back in this city,” while announcing plans to open the eighth Apple retail store in Shanghai soon.

According to the Financial Times, Tim Cook has deepened Apple’s connection to China over the past 20 years. Through a secret agreement in 2016, Apple invested $275 billion in the Chinese economy, its labor force, and technological capabilities. Consequently, iPhones have become the best-selling product globally.

Apple increasingly resembles a Chinese company due to its dependence on China’s manufacturing capabilities and the fact that 20% of its revenue comes from the country. At the China Development Forum, Cook expressed his utmost satisfaction, calling the relationship between Apple and China a “symbiotic” one.

Kevin O’Marah, a supply chain researcher, stated that Apple has built a complex and costly supply chain in China, making it challenging to shift production elsewhere. For over 15 years, Apple has sent top product designers and manufacturing engineers to China to work closely with suppliers. They play a vital role in designing processes, overseeing production, and ensuring supplier compliance.

Despite political tensions, Apple continues to invest in China, highlighting the importance of the relationship between the iPhone manufacturer and the country.

Many hold Tim Cook responsible for Apple’s heavy reliance. He was the one who shifted production from the US to China after succeeding Steve Jobs. Some former Apple employees blame Cook, saying, “All the supply chains depend on one person, Tim Cook. This mess is his fault.”

Although Apple has started diversifying its production by shifting some of it to India, it only slightly loosens the “symbiotic” relationship due to the strong and tightly-knit bonds between Apple and China. China remains a critical component in Apple’s supply chain.

Julie Gerdeman, CEO of supply chain risk management platform Everstream, explained, “China’s production scale is large, whereas most factories in India are small and medium-sized due to federal regulations designed for these businesses.”

As Apple continues to deepen its connection with China, it reaffirms the country’s importance to the tech giant’s success story. The 20-year bond between Apple and China has proven to be a mutually beneficial relationship that has reshaped the global technology landscape.

This article was written as if it were for Business Today, an expert in finance and economics. You can find more articles at Business Today.