Apple just loves China these days

By , May 17, 2016

apple_china

Apple is having a hard time in China these days. The economy of Apple’s largest market after the US is slowing down, which led the company to sell not as many iPhones it would have hoped in the last quarter. Just as worrisome, Apple is also facing some pushback from the government, which recently shut down the iBooks and iTunes Movie Stores in the country. What’s Apple to do about it?

There is nothing Apple can do about the deceleration of the Chinese economy, but there is a lot the company can do to warm the relationship with the people’s republic.

Back in April, the news fell that a state agency was behind the shut down of the iBooks Store and iTunes Movies in China. This, mind you, happened only six months after the two services were made available in the country.

China is no stranger to that kind of move, and while it is overly protective of what people can see, say, or do inside its own borders, it’s just as protective with what content companies can make available to the people. Especially if it’s a foreign company. Even worse if it is a US company. Adding fuel to the fire, a report from the NY Times yesterday explains how Chinese authorities are putting more scrutiny on big foreign companies (including Apple) because of the potential security threat they pose to the country.

That isn’t completely unprecedented. Ask Google, Twitter, and Facebook how they’re doing in China. So far, Apple has had it good because it was more of a hardware provider than a software or content provider per se. But now that the company is extending its offering beyond just the iPhone, iPad, and Mac, it’s raising flags in China.

Apple’s response has been almost obvious within the past week. First, the company made a sizable investment of $1 billion in the Chinese rip off of Uber, Didi Chuxing. According to the NY Times, the deal was closed in three weeks. Heck, it took me more time than that to close escrow on my house!

That move is important for several reasons though.

To my knowledge, this is the largest investment Apple has made in a company. And this is a Chinese company too. There is great potential return on investment here, all from a financial, technological, and political standpoint. Financial because Didi is wildly successful in China and seems to have some sort of unspoken backing from the government. Technological because this investment may very well help Apple figure out a thing or two about the car industry, and mapping (remember Project Titan?). Political, because making a billion dollars investment probably didn’t go unnoticed from the Chinese government.

Because a billion dollars doesn’t say “I love you” loud enough, Tim Cook also made a quick trip to China yesterday, and not too coincidentally, Apple added new sounds to GarageBand to “celebrate the rich history of Chinese music.” Talk about wining and dining!

I’m not sure about how much new GarageBand loops will help the company’s efforts in China, but a large stake in the dominant ride sharing service is sure to help reopen those doors that have been closed left and right lately. This will give Apple a stronger, albeit indirect, foothold in China without raising too much concerns, and at the same time, it may help warm this cooling relationship.

To be clear, I am not criticizing Apple here. There is nothing the company can really do besides honey talking China. I just think it’s interesting to see this develop before our eyes.

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  • TJ

    Why doesn’t Apple marry china then

  • n0ahcruz3

    Apple courting China no suprise here after that dismal quarter. Tim cook knows growth for the iPhone slowed here in the US so he’s pushing more for BRIC nations.

    • Rowan09

      My favorite person. Did you hear the greatest investor of all time just invested 1 billion dollars into Apple? Why would he do such a thing after a such a horrible quarter? Please tell me?

      • n0ahcruz3

        Lol i don’t know u tell me u know so much about apple hahaha.. Oh wait then why did Carl Icahn sold all his? Haha

      • Rowan09

        Why did he sell his stake? I’ll answer that question its due to China being restrictive and it believes it might be a problem, not based on him thinking Apple is no longer profitable or on the decline.

      • n0ahcruz3

        Hence Apple courting BRIC nations

      • Rowan09

        Are you trying to not make sense? Why would Apple not want to expand please tell me? China and India are huge markets so of course they are imported they only have billions of people and not nearly as saturated as the US.

      • n0ahcruz3

        Omg… If only i could block you. You’re ridiculous.

      • Rowan09

        No need I’m done because you are just a hater with no logic at all.

      • n0ahcruz3

        Hahaha you’re the one without logic. Im not a hater. You on the other hand is a super fanboy. Geez i would understand if you work at apple and pay you. But you’re just a fanboy you don’t even own shares at apple. Why so butthurt dude?

      • Rowan09

        Who told you I don’t own shares? I still have some but we’re talking about business not products and I’m a fan of technology, hence I own Apple tvs along with Amazon Fire tvs and IOS and Android devices. Before you make an assumption get the facts first my man. I just don’t want you to go on making these statements publicly in front of people and looking crazy. Sorry for caring so much.

      • n0ahcruz3

        “Stand corrected 9 years. There’s nothing to be optimistic about if you believe Apple is doomed show me the figures that says they are? I want the stock to go down a little more so I can jump in and buy.”

        The last sentence says otherwise. You didn’t say so you could “buy more”, you said so you can jump in and buy. That means you’re lying. Lol just can’t help laughing when you said iphone was 13 Years old!

      • Rowan09

        I owned and sold in the past and bought some more since my financial status changed significantly in the past month. I made a mistake with the iPhone thing and yet you insist on bringing it up. Just answer the question you’re dodging is Apple doomed or what because I don’t get the point of this if you’re not implying that?

      • n0ahcruz3

        They’re not doomed. Omg i never mentioned they’re doomed. Get your fact straight. And correction about expansion, in china they already expanded cause they have like how many Apple stores already there? India on the other hand has yet to open a single Apple store. And i said Tim cook courting China because of the 1 billion investment on the uber type service. And they might invest more on Chinese startups to woo chinese consumers developers etc. which are positive.

      • Rowan09

        So that’s what every company should do its positive as you stated but you were making it seem as if it was a sign of weakness. I never said you made the statement but you did imply it.

      • n0ahcruz3

        China now is a hard market to crack for every smartphone manufacturers. Not only China’s economy slowed, but local manufacturers offering low cost with high end specs like Xiaomi etc. which can disrupt the sales of the big companies like Apple and Samsung.

      • n0ahcruz3

        Come on we’re on the same Apple boat here. I don’t want apple to be out innovated by others. I do however criticize some of their decisions with regards to iPhone upgrades.

      • Rowan09

        I know. I agree they made some dumb decisions and I do want to see a upgrade OS for IOS 10 and merge IOS and OSX on iPads.

  • John Wickham

    Typo: I think “deceleration of the Chinese economy” should be “declination of the Chinese economy.”

    Also, “per say” is “per se.”

    • You’re right about per se, and I fixed that.

      However, deceleration is correct. It is the opposite of acceleration.

      Thanks

      • John Wickham

        Totally my bad — I read it as “declaration!”