Tim Cook, CEO of Apple, is in China on a high-profile visit coinciding with the opening of Apple’s second-biggest store globally in Shanghai. This move is part of a larger effort by Apple to reignite iPhone sales in China, its most crucial international market.
The new Shanghai store, located in Jing’an district and costing a reported $11.6 million, is the biggest in China and second only to Apple’s iconic Fifth Avenue flagship store in New York City. Cook expressed his enthusiasm for the new store and the city in a Weibo post, using a Shanghainese greeting and mentioning his enjoyment of local breakfast and sightseeing.
Shanghai, China’s financial hub, now boasts the most Apple stores in the country, with eight locations. There are currently 47 Apple stores across 24 cities in mainland China.
This expansion comes amidst a challenging market for Apple. The company faces stiff competition, a slowing economy, geopolitical tensions, and rising nationalism. Despite capturing the top spot in China’s smartphone market for the first time in 2023 with a record 17.3% share, iPhone sales in the first six weeks of 2024 have slumped by 24% year-over-year according to Counterpoint Research. During this period, Apple lost market share to Vivo, Huawei, and Honor, with Huawei’s sales experiencing a significant 64% surge.
Cook’s visit, his third to China in a year, underscores the nation’s critical role for Apple. China is not only Apple’s biggest overseas market but also a vital part of its manufacturing supply chain. Analysts point out that Apple retains a dominant position in the premium smartphone segment (above $800) within China. The company is proactively strengthening its offline presence through flagship stores to counter the rising influence of Chinese phone makers, especially Huawei’s resurgence, in physical sales channels.
Earlier in March, Apple announced the expansion of its Shanghai research center to encompass all product lines and revealed plans to open a new applied research lab in Shenzhen later this year. These moves highlight China’s central role in Apple’s future growth strategy.
Cook further emphasized the significance of China’s supply chain by hosting an information session with three key Apple suppliers at the company’s Shanghai office. He also met with BYD’s founder and chairman, praising Chinese suppliers for their advanced manufacturing capabilities.
Cook’s social media posts showcased visits to a film studio and meetings with mobile game developers, along with interactions with fans and staff. These efforts signal Apple’s commitment to the Chinese market despite growing competition from Huawei.
Despite a recent trend of online calls for patriotism-driven support for domestic brands, some Apple fans in China remain loyal. They appreciate the design, functionality, and user experience offered by Apple products. This loyalty suggests that while competition intensifies, Apple retains a strong brand presence in China.
