You may have noticed that Apple has opened one of its largest applied research labs outside the United States in China. The move marks a significant step in the tech giant’s approach to the world’s largest smartphone market. This development comes at a time when Apple faces stiff competition from local companies like Huawei Technologies.
The new facility in Shenzhen, one of China’s major technology hubs, began operations on Thursday. This laboratory is located in Shenzhen Park within the Hetao Cooperation Area. The area was developed under the guidance of the central government to promote technical cooperation between Shenzhen and neighboring Hong Kong, according to a report in state media People’s Daily.
Apple’s new labs aim to foster collaboration and product development
Apple announced plans to establish the institute in March. This is expected to strengthen the company’s research and testing capabilities for key products such as the iPhone, iPad, and mixed reality headset Vision Pro. The institute also aims to strengthen Apple’s partnerships with local suppliers in China.
Initially, the lab will span 20,000 square meters (215,000 square feet) and serve as Apple’s research and development (R&D) hub in the Greater Bay Area. The region includes Hong Kong, Macau, and nine cities in Guangdong province. Once fully operational, the facility is expected to employ more than 1,000 domestic and international personnel. According to reports, this will make it Apple’s largest laboratory outside the United States.
Despite the diversification of supply chains, investment in China remains strong.
Despite Apple’s steps to diversify its manufacturing supply chain to other countries, its research and development investments in China remain strong. Mainland China, Hong Kong and Taiwan remain Apple’s biggest markets outside of the Americas and Europe.
Earlier this year, Apple announced that it had established research centers in major Chinese cities, including Beijing, Shanghai, Suzhou, and Shenzhen. Over the past five years, Apple has doubled the size of its research and development team in China, underscoring its commitment to the region.
But Apple faces increasing competition from local smartphone makers, especially Shenzhen-based Huawei. According to data from research firm CINNO, Huawei’s smartphone sales in mainland China exceeded Apple’s for the first time in about four years in August. The resurgence comes as China’s smartphone market shows signs of recovery.
According to a report by the China Academy of Information and Communication Technology, a government-affiliated think tank, overseas smartphone shipments, including Apple’s iPhone, decreased by 12.7% during the same period.
Apple’s Chinese market share declines
In the second quarter of this year, Apple fell out of the top five smartphone vendors in China, and its market share fell to less than 14%, according to research firm IDC. Additionally, Apple’s sales in mainland China, Hong Kong, and Taiwan decreased by 6.5% year-on-year to USD 14.73 billion in the June quarter.
This is a testing period for Apple, which is trying to navigate the competitive landscape of China’s smartphone market while ramping up research and innovation efforts within the country.
