Apple CEO's Beijing visit prompts talk of expansion

PUBLISHED : Wednesday, 28 March, 2012, 12:00am
UPDATED : Wednesday, 28 March, 2012, 12:00am


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Apple CEO Tim Cook's visit to Beijing this week has prompted bullish speculation about the technology giant's potential new investments and alliances on the mainland.

News of Cook's presence in the capital initially spread on Monday through Sina Weibo, the Twitter-like Chinese micro-blogging service, after customers spotted the executive inside the Apple Store at the Xidan Joy City mall, took pictures with him and posted these images online.

Apple spokeswoman Carolyn Wu confirmed the visit, Cook's first as head of Apple, and his scheduled meetings with unnamed government officials yesterday and on Monday. 'We look forward to even greater investment and growth here,' Wu said.

Analyst Wang Ying, of market research firm Analysys International, was upbeat about Apple's future business announcements on the mainland. She said Cook's visit showed that the chief executive 'attached great importance to continuing Apple's strong performance in China, the influence of its brand in the market and relation with the Chinese [telecommunications] carriers'.

China Telecom this year became Apple's second carrier-partner for the iPhone after No2 carrier China Unicom. Apple has yet to reach a deal with the country's largest network operator, China Mobile.

Last October, Cook declared China - comprising the mainland, Hong Kong, Macau and Taiwan - as Apple's second-largest market after the United States, with a record US$13 billion in sales during the company's financial year which ended on September 24.

Apple had earlier announced plans to have as many as 25 branded stores in the country by this year, but this has been a slow-paced retail expansion. It currently has two stores in Beijing, three in Shanghai and one in Hong Kong.

Optimism over the firm's future investments is buttressed by its estimated US$8 billion in capital spending in its current fiscal year to September, including US$900 million for retail stores and US$7.1 billion for product tooling and manufacturing equipment.

Wang said the release of the highly anticipated third-generation iPad on the mainland this year would 'offer another great opportunity for Apple'. But the mainland trademarks of the iPad have been locked in litigation, as cash-strapped Proview Technology (Shenzhen) claims it owned those trademarks.

Apple also faces scrutiny from labour activists, who have accused its top manufacturing contractor, Foxconn, of abusing workers' rights on the mainland.