Is Apple's China R&D centre an attempt to show that China is more important than India?

Going by the data from all quarters, the iPhone maker isn't in the best of shapes when it comes to the China market. It's the slow down in the China market that seemingly compelled Tim Cook to look at India with hopes. After all, never before has India got mentioned in Apple's earnings call, and this was also the first time that Tim Cook visited India to make a slew of announcements. Today, we have the first (in Asia) R&D centre for Maps and an incubator in Bengaluru, along other announcements.

If you were thinking that India is finally becoming the 'apple' of Tim Cook's eyes, then the latest announcements will tell you otherwise. Tim Cook has announced that Apple will have an R&D centre in China by the end of the year. And why not, Apple believes that we are where China was 6-7 years ago. But that's not all, the company may have also miffed officials with its R&D in India announcements.

Tim Cook's latest visit, and second in the past four months, has led to the announcement of a new R&D center, which is said to be first of its kind in Asia. His previous visit to China was followed by a 'surprise' India visit wherein he announced the R&D centre for Maps. This has also led many to believe that Cook's announcement for China is rather late. But what's caught everyone's attention is how Cook called for a media briefing to discuss the new center.

A Forbes report points out, "Apple’s hesitation over such a move has been quite embarrassing, especially since China has surged to become its second largest market in the last three years. The lack of such investment is also embarrassing for China because India, a much smaller market for Apple, became the first Asian recipient of an R&D center from the US tech giant earlier this year."

This R&D centre will include new as well as existing Apple staff in China. It is believed to have a staff strength of roughly 9000 in China working across 42 retail stores, and has about 45 corporate offices in China. Apple’s new research and development center will be built by the end of the year, Cook told Vice Premier Zhang Gaoli.

Moreover, reportedly, a Chinese media report said that it will be the first independently operated R&D facility in Asia and apparently an attempt to show that 'it will be more important than the one announced in India'. And, there's more. The Forbes report points out that the vague nature of the announcement points out that it was a rushed one with nothing planned.

Now, joining the dots, the new announcement, if really a rushed one, could quite be possible to woo Chinese government officials, and tell the government that China is still very important for the iPhone maker. On the other hand, in the wake of the plethora of Chinese vendors and Apple's losing market share, the company's investment into R&D seems a natural move to many.

Meanwhile, in India, the stepping stone is the 40,000 sq ft Development Centre space leased in Yelahanka, North Bengaluru. And, not so long ago, Apple had invested in Didi Chuxing, a Chinese car-hailing service, which was one of the most unexpected and unusual move by the company.

However, Cook's visit is believed to be a result of the recent services block issues related to iTunes films and iBooks. Moreover, Apple has also been pushing for renewable energy in China with its efforts to focus on Apple's plans of being environment-friendly company.

Published Date: Aug 18, 2016 15:33 PM | Updated Date: Aug 18, 2016 15:33 PM