On the evening of October 16th, Apple CEO Tim Cook announced his visit to Chengdu on his personal Weibo account and attached a photo of the Anshun Bridge taken by the iPhone 15 Pro Max. On October 17th, Apple announced that it would donate 25 million yuan to the China Rural Development Foundation, further increasing its support for helping farmers, empowering students, and revitalizing communities in China.
Cook said, "We are committed to supporting education projects across China and providing technical support to farmers and student groups, as education can change the fate of many people, create opportunities, empower communities, and support the development of the next generation
It is reported that this is Cook's second visit to China this year. Unlike the theme of supporting the development of rural communities in China, Cook mainly exchanged Apple's views on industrial and supply chains at the China Development Forum held on March 25th this year. Apple relies on China, which is both a manufacturing center and a rapidly growing consumer market for Apple. This is a symbiotic relationship that we both enjoy
It is worth noting that this year marks the 30th anniversary of Apple's entry into China. Currently, over 90% of Apple's products are still manufactured and assembled in China, which has driven the vigorous development of China's related supply chain over the past decade; Meanwhile, according to research agency data, in the second quarter of 2023, China has surpassed the United States as the largest market for iPhones.
However, in the face of the rise and demand challenges from competitors such as Huawei, Counterpoint Research estimates that the sales of Apple's flagship iPhone 15 series decreased by 4.5% compared to the iPhone 14 series within 17 days after its release.
China is both a manufacturing center and a rapidly growing consumer market
It is reported that Apple's support for the China Rural Development Foundation began with disaster relief and reconstruction after the 2013 Lushan/Ya'an earthquake. Afterwards, the two sides collaborated to establish the Shanpin Commune to support agricultural development, the "Smart Classroom" to introduce iPads into rural school teaching, and the Sichuan Mengdingshan Cooperative Development Training College, which has provided skills courses including e-commerce and quality control for more than 2400 rural cooperative directors.
Apple Vice President and General Manager of Greater China, Ge Yue, once stated that education is Apple's DNA and one of Apple's priorities in China and around the world. Apple has provided more people with better opportunities to receive education through a series of training programs covering from the chairman of rural cooperatives to the improvement of supply chain workers' abilities
According to Apple, Apple has donated over 250 million yuan in disaster relief assistance and rural development in China, with cooperative foundations including the China Rural Development Foundation, the China Development Research Foundation, and the One Foundation.
In fact, for Apple, China is both a manufacturing center and a rapidly growing consumer market. In May of this year, Apple released a list of its supply chain for the fiscal year 2022. Among all the factories involved in Apple's supply chain, China has the largest number, far surpassing Japan and the United States. As Apple's largest production base in the world, China assembles and produces over 90% of iPhone products worldwide.
Bloomberg Intelligence's analysis report shows that by 2030, Apple may only transfer about 10% of iPhone manufacturing to regions outside of China, and even with active action, it is expected that the maximum transfer will not exceed 20%. China has created a smartphone manufacturing center, and there is almost no place to replicate it.
Over the past decade, Apple's products have also become increasingly popular in China. Apple's financial report for the third quarter of 2023, as of July 1, 2023, shows that the iPhone remains Apple's core revenue source, close to half of its overall revenue. By region, Apple's revenue in the Americas was $35.383 billion, compared to $37.472 billion in the same period last year; The revenue of the European department was $20.205 billion, compared to $19.287 billion in the same period last year; The revenue of the Japanese department was 4.821 billion US dollars, compared to 5.446 billion US dollars in the same period last year; The revenue of other regions in the Asia Pacific region was $5.63 billion, compared to $6.15 billion in the same period last year. However, the net revenue from Greater China was $15.758 billion, compared to $14.604 billion in the same period last year, a year-on-year increase of 7.9%, and the revenue from Greater China accounted for approximately 19% of Apple's overall revenue.
Ping An Securities once stated in its research report in June this year that the recent intensive visits of technology giants such as Cook to China indicate that in the context of increasing international geopolitical risks, the demand of the US high-tech industry for China's entire supply chain and huge market, as well as the indispensable position of the Chinese market, has become prominent. In the short term, this may bring phased easing opportunities to China US relations.
It is worth noting that this year, after four years, Cook came to China again. However, it was the China Development Forum that began in March of this year that kicked off Cook's 2023 trip to China. On March 25th, at the 2023 annual meeting of the China Development Forum, Cook said, "This year is Apple's 30th year in China, and I am very happy to be here at this time
According to public sources, Cook made his first visit to China in 1996, and after serving as Apple's CEO, Cook also visited China multiple times, traveling throughout the country.
He had a conversation with Lu Mai, a consultant to the China Development Forum and former Vice Chairman of the China Development Research Foundation, during the CDF Talk (Innovation Speech at the China Development Forum) segment, We have a huge supplier system and our own flagship store in China. Looking at Apple's development in China over the past 30 years, we are delighted and honored to collaborate with China to serve our customers and consumers. We have grown together with China, and this is a symbolic and friendly relationship
Cook also said, "The pace of innovation development in China is very fast, and I think it will continue to accelerate in the future. Looking at innovation worldwide, such as artificial intelligence and augmented reality, the development of technologies is very rapid, which will have a significant impact on humanity. Therefore, as inventors of technology, we need to ensure that the way we use these technologies is correct
Will Huawei's sales surpass Apple's?
However, Huawei's return may pose a challenge to Apple's leadership in the domestic market.
On October 17th, a market research agency showed that in the 40th week of 2023 (October 2-8), Huawei ranked first in the Chinese smartphone market with a sales market share of 19.4%, surpassing Apple's 17.4%. Statistics also show that Huawei's weekly sales reached 1.104 million units in the 40th week, making it the only smartphone brand to surpass a million units, while Apple followed closely with sales of 990000 units.
At the same time, the reporter noticed that Canalys also stated in its global smartphone sales report for the third quarter of 2023 released today that although Huawei is outside the top five, it has achieved a strong recovery in the Chinese market through the new Mate series products. The release of new products from Huawei and Apple ignited the market this quarter, surpassing many updates to the flagship series of manufacturers. The new products from Huawei Mate series, equipped with the latest Kirin chip, have received a warm response from consumers in China. At the same time, Apple is strengthening its new iPhone 15 series to provide better performance and functionality to continuously stimulate demand, "said Canalys analyst Liu Yixuan.
In addition, there have been reports recently that Huawei aims to ship 60-70 million smartphones in 2024. Huawei has added sufficient orders to the supply chain to ensure that this shipment number can be achieved throughout 2024. In response, two securities analysts told reporters, "The data meets expectations." Moreover, multiple institutions have also pointed out in their forecast reports on the sales or shipment volume of Huawei smartphones that the sales of Huawei smartphones are expected to reach "50 to 60 million units" or "at least 60 million units" in 2024.
According to Canalys' 2022 domestic market share ranking, vivo, which ranked first, shipped 52.2 million units last year. This means that if Huawei's shipment volume can reach 60 million units next year, it will steadily become the first in the domestic market. TrendForce Consulting, on the other hand, stated that the sluggish market and Huawei's strong return may impact the overall sales of iPhones this year. Therefore, it is estimated that the total production of iPhones for the year will fall between 220 to 225 million units, a decrease of about 5% year-on-year.