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Apple’s R&D centers helpful to make Apple fresh: analysts

By Zhu Shenshen | March 20, 2017, Monday | Online Edition

APPLE Inc will add localized and "aggressive" features in next-generation iPhones after setting up new research centers in China, where it faces strong challenges from local rivals, analysts said today.

Apple announced on Friday to invest 3.5 billion yuan (US$507 million) to establish four research centers in China including one in Shanghai, which will be open "later this year". It was the first time for Apple to establish research facilities in China, its second biggest regional market.

"Apple has to adapt strategies to make itself more localized in China when it faces aggressive Android phone rivals here," said Jia Mo, a Shanghai-based analyst of research firm Canalys.

Through the new centers, Apple can better handle the competition with local competitors like Huawei, Xiaomi and Oppo, said Roger Kay, an analyst at Endpoint Technologies Associates Inc, who called the competition "irritant".

In the recent quarters, Apple's revenue in China declined 12 to 16 percent year-on-year, because of tough competition from cheaper local smartphones and macroeconomics weakness.

The iPhones can meet the localized specific demand in China, such as enhanced selfie feature and super-powerful battery. It means that Apple is losing innovation advantages compared with other brands, said Canalys' Jia.

By the end of 2016, Huawei, Oppo and Vivo took the top three positions in the domestic smartphone market. They have developped high-end models to challenge Samsung and Apple's market positions in the segment.

Samsung has developed models specifically for Chinese consumers like enhanced camera for selfie, beauty optimization software and assistant tools for payment and online "Hongbao" (red packet money among family members and friends). Samsung named the models as C series representing designed for China.

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