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Apple Inc. Tries To Combat Weak Chinese iPhone Sales With New Research Centers

AAPL – Company planning two additional research centers in China.


Apple Inc. (NASDAQ:AAPL) is doubling down on its investments in China-based research hubs, today announcing two more research centers, as it attempts to stave off waning iPhone sales in the world’s largest smartphone market.

The two new hubs come in additional to two already-planned centers. Bloomberg has some additional detail on the new centers, which are part of a larger $500 million plan:

The announcement comes as Chief Executive Officer Tim Cook undertakes his latest trip to a country that ranks as Appleā€™s single biggest overseas market. Apple said it plans to build new research facilities in the eastern Chinese cities of Shanghai and Suzhou, on top of centers already slated for Beijing and the southern city of Shenzhen. It also pledged to spend at least 3.5 billion yuan ($507 million) on research institutions.

Apple noted that all four centers will open by the end of 2017. The company’s Chinese-language press release states the research and development hubs will be used to develop technical experts in the Apple supply chain. Apple comments below (translation courtesy of Google Translate):

“We are looking forward to working with more local partners and academic institutions through the expansion of R & D centers in China,” said Dan Riccio, senior vice president of hardware engineering at Apple. “We are honored to have excellent talent and positive entrepreneurial spirit in China And the developers and suppliers here to work together to make our business in this market to flourish.”

Apple boasts that it’s created about 4.8 million jobs already in China. That number includes 1.8 million iOS app developers, along with other iOS-related jobs.

Those jobs thus far haven’t translated into a bigger smartphone market share, however. The latest data indicates Apple is falling further and further behind China-based firms’ lower-prices smartphone offerings, with nearly half of China’s smartphone market now owned by Oppo, Huawei, and Vivo devices.

Apple Inc. shares were trading at $140.56 per share on Friday morning, down $0.13 (-0.09%). Year-to-date, AAPL has gained 21.89%, versus a 6.22% rise in the benchmark S&P 500 index during the same period.

AAPL currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #1 of 28 stocks in the Technology – Hardware category.

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