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March 21, 2017

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Apple to set up research hubs

APPLE Inc will add localized and “aggressive” features in its next-generation iPhones after announcing it will invest 3.5 billion yuan (US$507 million) to set up research centers in China to compete better with Chinese rivals, analysts said yesterday.

The investment will be pumped into four research centers in China, including one in Shanghai which will be open “later this year,” Apple said on Friday. It is the first time that Apple will establish research centers 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 at researcher Canalys.

Apple aims to use the centers to compete more effectively with domestic rivals like Huawei, Xiaomi and Oppo, said Roger Kay, an analyst at Endpoint Technologies Associates Inc.

Apple’s revenue in China has declined 12-16 percent year on year in recent quarters amid tough competition from low-cost domestic smartphones.

At the end of 2016, Huawei, Oppo and Vivo ranked the top three in the domestic smartphone market. They have developed high-end models to challenge Samsung and Apple.

Huawei is set to narrow its market share gap with Apple to under 5 percentage points in the global smartphone market this year, said research firm TrendForce, while Samsung has developed models specifically for Chinese consumers.



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