AAPL Apple Inc

By Eva Dou 

BEIJING--Tim Cook said he "caught a cab" in Beijing on Monday morning. The unusual part about the ride was its $1 billion tab.

The Apple Inc. chief executive tweeted photographs of himself learning to hail a ride on China's answer to Uber Technologies Inc. from the president of the company, Didi Chuxing Technology Co., in which Apple on Friday announced a $1 billion investment.

The visit, which also included a meeting with Chinese startups, appeared to be part of a charm offensive aimed at both Chinese regulators and investors wary of Apple's prospects in its second-largest market.

"It's a message to shareholders, saying, 'Look, we believe in the potential of China,'" said Bryan Ma, an analyst for market-research firm IDC.

Apple's stock fell to a two-year low after the company posted its first revenue decline in 13 years, with the saturation of China's smartphone market a major factor. Apple has also gotten caught up in a crackdown around Internet content, with Chinese regulators shutting down its digital book and movie services last month.

Billionaire investor Carl Icahn last month told CNBC he had sold his stake in Apple due to China's "attitude" toward the company.

Mr. Cook's upbeat tone on Monday reflects a strategy common among Western companies not speaking publicly about regulatory challenges in China. Facebook Inc. Founder Mark Zuckerberg is perhaps the best example, continuing to give optimistic statements about China while he attempts to get his website unblocked. In March, Mr. Zuckerberg posted a photo of himself cheerfully jogging at Tiananmen Square on a smog-cloaked Beijing morning.

An Apple spokeswoman declined to say if Mr. Cook will meet with Chinese regulators on this trip. China's technology, Internet and content regulators didn't immediately respond to faxed questions on whether they planned to meet with Mr. Cook.

Western companies are grappling with recent regulations that require foreign companies to share more information with China's government and restrict some types of business to domestic companies.

In shutting down Apple's book and movie services, Chinese regulators cited a new law that restricts licenses to Chinese companies, according to people familiar with the matter. Apple is considering its options, which include finding a Chinese partner company, one of the people said.

The company is also facing a slowdown in China sales. Apple's iPhone sales in China fell to 13.1 million units in the first quarter from 16.2 million a year earlier, according to IDC, which meant China accounted for almost a third of Apple's global iPhone sales decline during the period. Apple doesn't break out revenue by country.

Apple slid from first to fourth place in China's smartphone market in the first quarter, trailing Huawei Technologies Co., Oppo Electronics Corp. and Vivo Electronics Corp., according to IDC. The slide is in part due to Apple customers holding out for the expected launch of a new iPhone this fall.

Amid the glum news comes Apple's $1 billion investment in Didi, one of its largest to date. The Chinese Internet startup was an unusual investment target for Apple, but it pointed to the company's ambitions in developing autonomous cars, as well as its continued focus on the China market.

On Monday, Mr. Cook praised China's startups and government policies to promote innovation at a meeting with Chinese app developers. The panel speakers included Chinese startups such as group-buying platform Meituan Dianping and news app Toutiao.

"My message to all of you today and to all of the developers who are not here is, we are happy to work with you. We are proud to work with you. We are humble to work with you," said Mr. Cook, according to a video of his remarks on a Chinese media site.

Mr. Cook said China-based app developers have earned more than $7 billion, with over half of that in the past 12 months.

The visit was Mr. Cook's eighth since he became Apple's CEO in 2011. It wasn't clear how long he was staying in Beijing this time.

Yang Jie and Kersten Zhang contributed to this article

Write to Eva Dou at eva.dou@wsj.com

(END) Dow Jones Newswires

May 16, 2016 08:25 ET (12:25 GMT)

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