Apple CEO Tim Cook makes second China visit in 2023 amid tough iPhone 15 market and App Store controversy

Speaking at an Apple Store in Chengdu last week, Cook lauded local developers’ work on apps for the company’s new Vision Pro mixed-reality headset
Cook’s latest China trip comes at a time when Apple’s iPhone 15 series is facing stiff competition from Huawei’s new 5G handsets

Apple

Dylan Butts

Published: 8:00pm, 17 Oct 2023

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Apple chief executive Tim Cook last week made a low-key visit to mainland China – his second trip to the country this year, following a week-long whistle-stop tour in March – as the US technology giant pursues expansion initiatives amid regulatory scrutiny and slow economic growth in one of its best-performing markets.

Speaking at an Apple Store in Chengdu, capital of southwestern Sichuan province, Cook told reporters that he was excited about the work Chinese-based developers have done on apps for the company’s Vision Pro mixed-reality headset, according to a report on Tuesday by state media China Daily.

Unveiled in June, Apple’s new Vision Pro is the company’s first major new product in a decade. It is a “spatial computing” device that changes the way users interact with their favourite apps, capture images, enjoy television shows and films, and connect with others via FaceTime.

The rest of Cook’s itinerary for this trip to China, where he typically receives red-carpet treatment, is unknown. Apple did not reply to a request for comment.

Apple chief executive Tim Cook takes a selfie with Chinese singer Vivi Jiang Yingrong outside an Apple Store in Chengdu, capital of southwestern Sichuan province, during his latest visit to China last week. Photo: Weibo

Cook’s latest visit underscores the importance of mainland China, which has the world’s biggest number of internet users and largest smartphone market, as Apple’s manufacturing hub and major overseas market.

In March, Cook met Chinese Premier Li Qiang, Minister of Commerce Wang Wentao and other top officials as part of a delegation of C-level executives and scholars from overseas who attended the government-organised China Development Forum in Beijing.

The senior officials reassured the delegation’s representatives that China would continue to open up and provide a top-tier business environment in spite of changes in geopolitical affairs.

Cook’s latest China trip, however, comes at a time when the latest iteration of Apple’s iPhone is facing stiff competition in the premium segment of the country’s smartphone market.

“China’s headline numbers for the [iPhone] 15 series are in the red, and this is a reflection of the broader decline in consumer spending [in the country],” said Counterpoint Research analyst Mengmeng Zhang in a market report published on Monday.

The first 17 days of iPhone 15 sales were down 4.5 per cent in China compared to the launch of the iPhone 14 last year, according to data from Counterpoint. Still, the research firm cited shorter pre-holiday shopping periods, coupled with supply mismatches on the iPhone 15 Pro Max, as contributing factors to that performance.

In addition, the new iPhone 15 series is competing with a resurgent Huawei Technologies, which recently released its new Mate 60 Pro and Mate 60 Pro+ 5G handsets that are powered by an advanced, made-in-China mystery chip, igniting patriotic fervour among local consumers.

“China’s premium smartphone market is becoming increasingly crowded, and related to that, there’s been some impact from the Mate 60 series from a marketing perspective,” Counterpoint associate director Ethan Qi said on Tuesday.

“All of these things are working together to take some of the shine away from Apple’s lustre during the first few weeks of iPhone 15 sales,” Qi added.

During his visit to Chengdu, Cook reportedly also showed up at a Tencent Holdings video gaming tournament for Honour of Kings. This is a stalwart game on the App Store and the Chinese internet giant’s marquee mobile title that in 2020 became the first game in history across any platform to average more than 100 million daily active users.

Cook’s latest trip also comes as Apple deals with the country’s strict censorship laws. Apple recently had to toughen its app developer policy in compliance with Chinese regulations, which require apps to receive government approval before these are made available on the company’s Chinese App Store.

That move, which is expected to severely shrink the number of apps on Apple’s local iOS platform, was made after internet regulator the Cyberspace Administration of China published a list of the country’s properly registered “app distribution platforms” under regulations introduced last year, with Apple notably absent.

Apple had been meeting with regulators to voice concerns about the policies, according to a report from the Wall Street Journal, in efforts that appear to have failed.

The App Store shake-up follows sources telling the Post in September that some Chinese government workers had been told to stop using Apple’s iPhones at work, citing national security risks amid heightened geopolitical tensions with the United States.

In a separate report on Tuesday, Counterpoint said the global smartphone market had recorded its lowest third-quarter sales in a decade, declining 8 per cent year on year.