In China Trade War, Apple Worries It Will Be Collateral Damage

Apple, meanwhile, has a deal with China’s biggest telecom company, China Mobile, giving it a direct channel to nearly 900 million subscribers in China. The competition to sell smartphones in the country has become increasingly intense, with a number of other Chinese companies also offering high-end — but usually lower-priced — phones.

Mr. Cook’s frequent visits to China are part of Apple’s increased efforts to court China’s leadership, started in 2016 after the country suddenly removed Apple’s iTunes Movies and iBooks Store there.

Apple set up two research-and-development centers in China, made a $1 billion investment in the Chinese ride-sharing company Didi Chuxing, and created a new position, head of China, that reports directly to Mr. Cook. The company appointed Isabel Ge Mahe, who was born in China, to the role.

Apple also complied with Chinese orders to store its data on Chinese-run servers and to pull certain apps from its App Store, including The New York Times app and many that allowed Chinese users to get around censorship that blocks sites like Facebook and Twitter.

The company has reason to fear retaliation. In 2014, the Obama administration indicted five Chinese military hackers, stoking tensions already high from leaks about American surveillance from the former government contractor Edward J. Snowden.

Months later, Chinese regulators delayed approvals of the iPhone 6 for additional security reviews. Apple executives perceived the moves as retaliation, said people familiar with the matter, which has not been previously reported.

Apple’s primary leverage with the Chinese government is Chinese consumers’ love for Apple products, said Dean Garfield, head of the Information Technology Industry Council, a trade group that represents Apple and other tech companies.

However, Mr. Garfield added, Chinese consumers would also love Facebook and Google, two products blocked in China. “There are limits,” he said. “Xi and the national party will do what’s in their interest.”

Article source: https://www.nytimes.com/2018/06/18/technology/apple-tim-cook-china.html?partner=rss&emc=rss