Apple doubles down on China R&D amid iPhone sales slowdown

As iPhone sales face a slowdown in the largest smartphone market globally, aka China, Apple is expanding its applied research operations in the country. With stiff competition from Huawei and other prominent domestic smartphone makers, Apple is doubling down on its research operations to stay ahead in the game.

In a statement provided to the South China Morning Post, Apple revealed its intentions to bolster its research center in Shanghai, with a focus on supporting all its product lines.

Additionally, the tech giant plans to open a new lab in Shenzhen by the latter half of 2024. This new facility will be dedicated to testing and research, focusing on key products such as the iPhone, iPad, and Vision Pro headset.

The company underscored that the upcoming facility in Shenzhen will enhance its collaboration with local suppliers and provide support for local employees. Apple’s vice president and managing director of Greater China, Isabel Ge Mahe, expressed pride in fostering stronger connections in China and expanding the company’s footprint there. She remarked:

We have already invested 1 billion yuan (US$139.2 million) into the existing applied research lab in China.

These recent moves come on the heels of a commitment by Apple to ramp up capital spending in Greater China, the company’s third-largest market globally, following the Americas and Europe.

This strategic shift follows a decline of 24 percent in iPhone sales in mainland China during the first six weeks of 2024. Apple faced formidable competition from a resurgent Huawei at the high end of the market, coupled with pricing pressures in the mid-range from Chinese smartphone heavyweights such as Oppo, Vivo, and Xiaomi.

Recently, the Cupertino tech giant took action in response to sluggish sales and intensified competition from Huawei by offering discounts on the iPhone 15 line in China.