Apple in China
China is an extremely important market for us and we will continue to look at how to grow it further.
Tim Cook, Apple CEO1
China is Apple’s fastest growing market but the road to success has not been smooth. Apple’s products are pre-
dominantly contract manufactured in China by Foxconn, a Taiwanese company that was the focus of considerable
criticism and negative publicity for poor working conditions and suicides among its young workers. Apple, an
aspirational brand in China, was named the top brand in the world in 2015 by Brand Finance—followed by their
global nemesis, Samsung. The growing consumer power of the Chinese middle class has accelerated demand for
Apple products. Apple’s popularity in China led to considerable counterfeiting or copying of their prototypes,
products, know-how, trade secrets, service model, and store concepts.
The propensity of some Chinese to show
off high-status consumer goods further spurred the activities of Apple counterfeiters and imitators. After more
than a quarter century of economic growth, China’s high-growth economy was slowing. Despite these obstacles,
Apple CEO Tim Cook maintains that China is key to Apple’s bottom line now and in the future.
In 2001, Apple turned 25 and the consumer electronics domain was experiencing significant changes. The use
of digital variants of lifestyle products, such as still and movie cameras, once considered exotic, became com-
monplace. Information previously accessed, or media consumed, using a personal computer (PC) was being
accessed using portable devices like digital music players; and early smartphones that combined personal digital
assistants with mobile phones were available. With the introduction of the iPod followed by the iPhone, Apple
underwent a substantial transformation. Apple shifted from their earlier and singular emphasis on the PC to an
integrated consumer electronics ecosystem.
That same year, Steve Jobs unleashed the Digital Hub strategy that positioned Apple PCs as an anchor and
value enhancer for emerging digital lifestyle devices. For example, a movie captured using a digital camcorder
with limited capabilities could be edited using Apple PC application software to create a professional look for
personal memories or for commercial purposes. Apple Computer formally renamed itself Apple Inc. in 2007. By
2009, a short two years later, nearly 60 percent of Apple’s sales were from the iPhone and iPod.2
By that time,
IBM had exited PCs and sold its PC business to the Chinese multinational, Lenovo. IBM, Apple, and Lenovo
were experiencing and responding to the maturation of the PC industry, each taking a different path.