iPhone 5: What is Apple CEO Tim Cook Doing in China?

on March 27 2012 10:35 AM
Apple CEO Tim Cook talks to employees at an Apple store in central Beijing
Apple CEO Tim Cook talks to employees at an Apple store in central Beijing Reuters

Tim Cook has taken a step that Steve Jobs never did: Visit China. This is the first time an Apple CEO has visited the country in an official capacity, several sources report, including Apple-centric blog AppleInsider.

'Great Meetings with Chinese Officials'

According to the Wall Street Journal, the Apple CEO met with government officials in Beijing on Monday, to discuss the Apple's plans for expansion in China. Cook had great meetings with Chinese officials today, the company's China-based spokesperson Carolyn Wu said to the Journal. China is very important to us and we look forward to even greater investment and growth here. Apple did not specify which officials the CEO met with.

Cook has also been spotted in the Apple Store in the Xidan district of Beijing, and numerous photos surfaced on Sina Weibo, China's Twitter-like microblogging service. Apple currently has two retail stores in Beijing, three in Shanghai and one in Hong Kong.

China, 'Very Key' to Apple's Financial Results

Last year, Cool said that China is Apple's second-largest market outside of the United States, which makes it very key to Apple's financial results. Moreover, a recent IDC report forecast that China will be the leading smartphone market, dethroning the U.S for good.

Apple has had incredible success with the iPhone in China, said Cook during a recent Goldman Sachs conference. Apple's earnings have surged from nothing to $13 billion in the past few years, so we've really been focused on trying to understand that market, added the CEO.

Potential Reasons behind Cook's Visit to China

The specific reasons behind Cook's official visit to China have not been disclosed, but there are several potential goals. First of all, early March marked the launch of Apple's iPhone 4S on China Telecom, now the second carrier to support the iPhone. Back in November 2009, Apple started selling the iPhone in China via China Unicom. A few months ago, in August, some reports indicated that Apple has also struck a deal with China Mobile. However, the carrier is now the only Chinese carrier not providing the iPhone.

Second, Cook could be keeping a closer eye on Apple's ongoing legal battle with Proview, a Chinese computer monitor maker who claims the rights to the iPad name. Proview has been using the iPad brand since 2001 at the least, and in December, a Chinese court ruled in favor of the monitor maker. Apple claims it has bought the rights to the brand in 2009, but Proview argues that only applied to Taiwan, but not mainland China. In a recent statement, Apple said Proview is misleading both consumers and court officials by claiming ownership of the brand.

Lastly, Apple is still under great pressure over working conditions at suppliers' factories, especially Foxconn. In response, Apple has requested the Fair Labor Association (FLA) to conduct thorough audits of its final assembly suppliers, including Foxconn. Apple has taken steps to reassure consumers that working conditions are humane, but now another open letter signed by roughly 50 NGOs and unions is pressing Cook to put an end to labor abuses in Apple's supply chain.

(reported by Alexandra Burlacu, edited by Surojit Chatterjee)

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