Apple Pledges Two New R&D Centers in China --Update
March 17 2017 - 10:39AM
Dow Jones News
By Tripp Mickle
Apple Inc. said it plans to open two more
research-and-development centers in China, beefing up the
technology giant's operations in a critical market where it has
faced a series of challenges recently.
Apple said the new centers, to be set up in Shanghai and Suzhou,
bring its total commitment to R&D facilities in China to more
than 3.5 billion yuan, or about $500 million. Last year Apple
committed to opening a similar center in Shenzhen, and currently
operates one in Beijing.
The announcement -- which Apple issued only in Chinese -- comes
as Chief Executive Tim Cook is slated to speak on innovation and
corporate social responsibility at the China Development Forum, an
annual gathering of Chinese officials and global executives that
begins Saturday.
Apple is grappling with rising pressure from homegrown rivals
and a string of other setbacks in the world's largest smartphone
market. Its sales in Greater China fell 17% in its latest fiscal
year to $48.49 billion, as Huawei Technologies Co. and other
Chinese companies gained share against its iPhone -- although Apple
said sales stabilized in the most recent quarter.
Apple last year also was forced to shut down its online music
and book services in China because they violated local media rules.
The company also faced criticism from local consumer groups last
year over complaints that iPhones were spontaneously shutting down
even as half the devices' battery life remained. Apple said a
limited number of phones were affected and offered free replacement
batteries for those devices.
China is a critical manufacturing hub for Apple, with the vast
majority of its products sold world-wide made by contract
manufacturers such as Foxconn Technology Group. The company says it
has created and supported 4.8 million jobs in China.
China's government increasingly is focused on developing more
advanced industries with higher-paying jobs than electronics
assembly. Opening R&D centers there, beyond any operational
benefits, has long been a way for foreign companies to show
commitment to that goal, and try to mitigate Beijing's concerns
about Chinese dependence on expensive foreign technologies.
Apple said the new R&D centers will work with Asian
companies to develop advanced technology and services. It plans to
hire graduates from Chinese universities such as Peking University,
Tsinghua University and Shanghai Jiaotong University.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
March 17, 2017 10:24 ET (14:24 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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