Today (November 25th), according to a reference message on Weibo citing relevant reports, Apple CEO Tim Cook appeared in Beijing on the same day to participate in the 2nd China International Supply Chain Promotion Expo. The Daily Economic News reporter noticed that this is Cook's third visit to China this year.
When asked how to evaluate Apple's partners in China, Cook said, "We attach great importance to Apple's partners in China. Without them, Apple would not be able to achieve what it is today." Apple's exhibition sign on site shows that over 80% of the company's 200 major suppliers are produced in China.
Behind the frequent visits of Apple executives to China: the supply chain cannot do without China
In recent years, the supply chain has been a key focus of attention for Apple executives visiting China. On March 20th of this year, Cook embarked on his first trip to China in 2024. After attending the opening ceremony of the Shanghai Jing'an Apple retail store, he also held a small sharing session with three Apple suppliers, BYD Electronics, BlueThink Technology, and Changying Precision, at the Apple China headquarters in Shanghai. At the time, Cook said, "For Apple's supply chain, I don't think there's anything more important than China
Seven months later, Cook and Apple's Chief Operating Officer Jeff Williams both appeared at a farm in Shunyi, Beijing. On October 25th, Minister of Commerce Wang Wentao met with Cook. Both sides had exchanges on the development of Apple's business in China and the economic and trade relations between China and the United States. The rapid development of China has helped Apple achieve rapid and sustainable growth. The company regards China as an important market and key supply chain partner, and will be committed to long-term development in China, continuously increasing investment in supply chain, research and development, and other fields. Apple is willing to continue to play a bridging role in promoting communication and exchanges in the field of China US economic and trade, "said Cook.
At that time, Jeff Williams visited Lixun Precision's iPhone assembly plant in Kunshan, Jiangsu, Bozhong Precision's high-precision equipment display center in Suzhou, and Lansi Technology's iPhone back cover glass assembly line and iPhone back cover glass production base in Changsha. In July of this year, he also visited Foxconn's factory in Guanlan, Shenzhen, Guangdong, as well as the intelligent production line of Lingzhi Manufacturing Factory.
Cook's frequent visits to China and Jeff Williams' visits demonstrate Apple's emphasis on the Chinese market and its partners, while also highlighting China's position in the global supply chain.
It is worth noting that over the past 30 years since entering the Chinese market, Apple has continuously expanded its supply chain in China, increased investment, collaborated with a wide range of Chinese suppliers, and improved the modernization level of its factories.
It is reported that in terms of technological breakthroughs, Apple will adopt joint innovation with the Chinese supply chain. The specific path includes: Apple dispatching product designers and manufacturing design engineers to stay in the supplier's factory for several months, collaborating to design new production processes, improving the details of the production process, until production runs smoothly and operates normally. In addition to manpower investment, Apple will also spend billions of dollars to purchase customized equipment for suppliers and develop some exclusive professional technologies.
In October this year, Apple used BlueThink Technology as an example to introduce that the cooperation between the two parties began 18 years ago. At that time, the first generation iPhone was originally designed with a plastic panel, but later changed to a glass panel design. At that time, no one was making a large glass screen. Williams and LanSi Technology Chairman Zhou Qunfei worked together in the factory for several months, making the impossible possible.
At the time, Williams bluntly stated, "Without our supplier partners, there would be no our products
The competition in the Chinese market is fierce, can Apple's revenue in Greater China see a turning point?
In addition to relying on the Chinese supply chain, Apple also attaches great importance to the huge consumer market in China. However, according to financial report data, the Greater China region has been the only market for Apple to experience a year-on-year decline for two consecutive fiscal quarters.
Apple's Q4 2024 financial performance as of September 28 showed revenue of $94.93 billion, a year-on-year increase of 6.07%; The net profit was 14.736 billion US dollars, a year-on-year decrease of 35.81%.
Divided by region, Greater China remains the only market where Apple's revenue has declined year-on-year, with a revenue of $15.033 billion for the quarter, a year-on-year decrease of 0.34%, falling short of analysts' expectations of $15.8 billion. Moreover, in the third quarter of 2024, the Greater China region experienced a year-on-year decline of 6.5%, while other regional markets saw year-on-year growth.
The reporter noticed that in the first and second fiscal quarters of 2024, Apple's revenue in Greater China decreased by 13% and 8.1% year-on-year, respectively. The decline in the fourth fiscal quarter has significantly narrowed compared to the beginning of the year.
Since the fourth quarter of this year, Chinese mobile phone brand manufacturers have released flagship models intensively, such as Honor Magic 7, iQOO 13, OPPO Find X8 series, vivo X200 series, etc. The Huawei Mate70 series is set to be released on November 26th, which means that the competition between high-end models of Chinese mobile phone brands and the iPhone 16 series will become even more intense.
The aforementioned flagship new phone demonstrates significant progress in technological innovation and user experience by Chinese mobile phone brand manufacturers. In terms of hardware specifications, including photography, battery life, and processors, there have been significant improvements. In addition, recent breakthroughs in generative artificial intelligence (GenAI) have provided a new opportunity for many brands, "commented research firm Counterpoint.
In order to further compete for market share, during the 2024 "Double 11" e-commerce festival, Apple announced a one month price reduction for all models of the iPhone 16 series, marking the first official channel price reduction since the release of the new phone.
Regarding Apple's price reduction strategy, Canalys senior analyst Zhu Jiatao analyzed to reporters over the phone that on the one hand, it is because the sales of Apple's new phones have declined year-on-year, and its Apple Intelligence has not yet landed in the Chinese market; On the other hand, domestic Android manufacturers are all growing. According to data compiled in the first three quarters of this year, Apple's market share of over $800 in China is 57%, while other domestic manufacturers account for 43%. Therefore, Apple still has some sense of urgency.