Apple is in the midst of a charm offensive in China.
Facing unexpected scrutiny from the Chinese government, the American technology giant is redoubling its efforts to win the hearts of the Chinese authorities and consumers.
China has never mattered more to Apple — and it’s willing to spend big bucks to prove it.
With the highest population in the world, it holds huge potential for Apple. After years of growth, the smartphone market is starting to slow amid an economic downturn — but it is still a vast market.
However, all is not well. Last quarter, amid Apple’s first ever iPhone sales decline, its smartphone sales in the Greater China area dropped a nasty 26%.
Meanwhile the Chinese government, which has historically tolerated Apple’s rise, is starting to take a dimmer view of the Cupertino company. In April, China forced the shutdown of Apple’s iBooks and iTunes Movie stores in the country six months after their launch there.
A new report from The New York Times on Monday now asserts the Chinese government is increasing the number of security reviews that Apple — and other foreign tech companies — must undergo.
Some accuse the Chinese government of being motivated by protectionism. “In this particular case, the digital books and movies offered by Apple are considered a potential threat to the Chinese government’s ongoing campaign of keeping out Western liberal ideas,” Minxin Pei wrote for Forbes last month. “In addition, the notion that Apple could dominate China’s digital content market must also have offended Beijing’s protectionist instincts.”
Whether the Chinese government’s actions are motivated by protectionism or genuine security concerns, Apple can’t afford to have its products restricted in one of its largest markets — especially at a time when broader questions are being raised about the company’s future growth prospects.
So Apple is throwing money at the problem.
Dipping into its vast, vast reserves of cash, last week Apple made a rare $1 billion investment into the Chinese ride-hailing service Didi Chuxing — a bitter rival of Uber in China. Many took the funding as a peace offering on Apple’s part.
Sina Tech news agency reporter Jia Jinghua told The Financial Times that “Cook is clearly keen to curry favour with Chinese authorities and with Chinese markets. He will take advantage of the latest investments into Didi to pay visits to key ministries.”
CEO Tim Cook has also taken the opportunity to visit China in a publicized tour, posing for photos with Didi Chuxing president Jean Liu, and visiting app developers in the country.
The latest move from Apple: An update for music-making app GarageBand targeting the country that “celebrates Chinese music,” including traditional instruments, Chinese musical loops, and language localisation.
If its cash injections don’t win over the Chinese authorities, then the sweet synthesized sounds of Chinese musical instruments might.
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