Tim Cook, The Man Who Likes China

                               by David Parmer/Tokyo

Last month, in May 2016, Apple’s Tim Cook made his eighth visit to China since becoming CEO in 2011. The news in China that greeted Mr. Cook was not all good, but not all bad either. The bad news first: the Chinese government (or one agency thereof) closed down two of Apple’s moneymakers; iTunes movies and books, after only six months of operation. And there is a significant slowdown in iPhone sales in Apple’s second largest market after the US. Looking at the short term it is easy to wring one’s hands, call foul and cash out of Apple. 

Or one could accept the bad news as speed bumps and as temporary, and partner with Chinese companies while settling in for the long game. Well, that looks like what Apple, under the direction of Mr. Cook, is doing. Recently Apple has made two major agreements with Chinese companies (“deals” in Trump-speak) both focusing on the long term.

First, Apple introduced Apple Pay to the Chinese market by partnering with China’s only domestic bankcard company, Union Pay, making mobile payments a snap for Apple product owners. Next, Apple boldly ignored its Silicon Valley neighbor, Uber, and voted with its checkbook for Didi Chuxin, Uber’s main China rival in the ride-hailing business. The check Apple wrote was for $1 billion. (For the record, Bloomberg Technology reports that Didi now operates in 400 Chinese cities and has 14 million registered drivers.)

Just about a year ago (May 2015) Mr. Cook did an interview with China’s domestic CCTV in which he noted:

“We’ve created over three million jobs in China.”

When the interviewer suggested that Apple might compete down-market, Mr. Cook replied:

“Our strategy is always to make the best product.”

So do Apple and Mr. Cook like China? Apparently so. The question now is what is Apple’s next move, and will China regulators cut them some more slack on what they can and can not sell in the China market?

CCTV Interview YouTube

Photo: Tim Cook, Weibo