Apple to open Shenzhen R&D hub, boosting city’s plan to remake itself as China’s ‘Silicon Valley’

PUBLISHED : Wednesday, 12 October, 2016, 12:34pm
UPDATED : Wednesday, 12 October, 2016, 11:28pm

Apple announced Tuesday that it will open a research centre in Shenzhen to tap the local talent pool for writing computer software, bolstering the Chinese government’s plan to remake the city into a hub for fostering technology and innovation.

The iPhone and iPad maker, which counts China as its third-largest global market, is already supporting -- together with its contract manufacturer Foxconn Technology Co -- over 200,000 jobs between advanced manufacturing and an economy built around applications, Apple said in an emailed statement.

“The establishment of a new R&D centre in Shenzhen allows Apple to facilitate better communication with iOS developers and come up with better products that cater to local customers,” said Dr. Neil Wang, greater China president for Frost & Sullivan.

The plan, unveiled by Apple CEO Tim Cook in Shenzhen, will be the company’s second China research hub, following an announcement two weeks ago to build a 300 million yuan (US$44.65 million) facility in the Chinese capital to focus on computer hardware and software, audio and video equipment, consumer electronics, telecommunications products and other advanced technologies.

Kitty Fok, managing director for IDC China, said that an Apple centre in Shenzhen would “make sense,” since much of China’s technology talent is centred in the region.

The investment in research is also a show of “commitment” to the Chinese market, Fok said.

Encouraged by the Chinese government’s support for an economy led by innovation, young entrepreneurs are taking advantage of Shenzhen’s burgeoning internet technology industry to launch their businesses, according to Liang Yongsheng, an official of the city’s Science Technology and Innovation Committee.

“In the past five years, the number of small and micro enterprises has risen by 22 per cent every year,” he said.

Shenzhen’s government will offer annual subsidies of 500 million yuan between 2015 and 2017 to persuade 100,000 manufacturers to set up shop and turn the city into a global hub for innovation.

There’s perhaps no better poster boy for Shenzhen’s draw than DJI, the world’s largest maker of recreational drones for civilians.

Frank Wang, an engineering alumnus of Hong Kong’s University of Science & Technology, established his company in Shenzhen, and built it over a decade into a company with a 70 per cent share of Shenzhen’s US$354 million in drone exports.

By the end of August, the city had already provided financial subsidies to 180 incubators, as well as hundreds of projects catering to do-it-yourself designers, tinkerers, hobbyists and inventors, Liang said.

Chinese Premier Li Keqiang brought star power to promote Shenzhen at the Global Entrepreneurial Leaders Forum. Besides Apple’s Cook, other luminaries of the Chinese technology industry in attendance included Tencent Holdings’ CEO Pony Ma, Foxconn’s founder Terry Gou and Jack Ma, founder of Alibaba Group.

Li’s visit to the Inno Park hub for technology startups was a gesture of support for Shenzhen’s ambitions for the world’s tech industry innovation centre, according to Guo Wanda, vice president of Shenzhen-based China Development Institute.

“It will help talents and capitals both domestic and overseas continue to the city,” he said. “The local government will be stimulated to launch further campaigns and incentives in entrepreneurship and startups.”