Apple must do this in China before releasing iPhone 16

Recently, Chinese Commerce Minister Wang Wentao met with Apple CEO Tim Cook and he said his country holds opportunities for Apple and other companies, asking the iPhone maker to continue building its business in China for “common development,” according to a press release.

CEO Tim Cook said China is an important partner in Apple's supply chain, and the company plans to increase investment in the country in the long term.

Apple is operating in a difficult environment in its key Chinese market, and it needs to overcome challenges in the country before releasing the iPhone 16. (Photo: Entrepreneur)

Last week, Cook also opened Apple’s newest flagship store in Shanghai and met with key suppliers in China, according to media reports. He also attended the China Development Forum in Beijing, as China seeks to attract foreign investors amid regulatory and global uncertainty.

In the latest move, leading advisory, brokerage and asset management firm Wedbush Securities said that Apple needs to overcome challenges in China, including a harsh macro environment, competition from Huawei, before releasing the iPhone 16 and "it all starts with reaffirming Apple's presence in China".

Tim Cook's latest trip to China is "a sign that Apple could double its smartphone market share in China ," Wedbush Securities said, amid reports that iPhone sales in China fell 24% in the first six weeks of 2024.

Apple is currently operating in a challenging environment in its largest overseas market, China, as it faces stiff competition from local Chinese smartphone makers, especially Huawei, whose consumer business is reviving in the country, following the launch of its Mate 60 smartphones.

“ The timing of this trip is important because fundamentally, Apple needs China and China needs Apple despite all the noise ,” Wedbush Securities added.

The COVID-19 lockdown in China in late 2022 severely disrupted Apple's supply chain, forcing the tech giant to diversify some of its production to countries like India and Vietnam. However, the majority of iPhone manufacturing and suppliers will remain in China, according to Wedbush Securities.

Apple is currently facing legal challenges in the US and the EU. The US Department of Justice sued Apple last week, accusing the tech company of illegally maintaining a smartphone monopoly. The EU also recently launched an official investigation into Apple over so-called antitrust rules.

HUYNH DUNG ((Source: CNBC))

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