Apple doubles down on China as local rivals pull ahead

Apple, WWDC 2017

Apple Inc is binding itself more closely to China as its share of the world’s biggest smartphone market slips and it becomes more reliant on selling services which require government approval.

A flurry of recent action by Cupertino-based Apple underlines its push to get on the right side of China’s notoriously tough tech regulators, as it looks to revive sales there.

This weekend it moved to block apps used to evade the country’s internet censors, a decision that fits with Beijing’s recent crackdown on unapproved online content. And Apple has announced it will establish its first China data centre in the politically important province of Guizhou and has created the new position of a managing director for Greater China, reporting directly to CEO Tim Cook.

Apple’s China revenues have stalled, falling for a fifth straight quarter in January-March, when sales grew in every other region. China recently slipped to Apple’s third-largest market, as consumers have switched to newer domestic offerings. The buzz around new launches has also cooled since the iPhone 6 in 2014.

When it unveils quarterly earnings later on Tuesday, Apple is likely to report another dip in China smartphone sales. Its once coveted iPhone has slipped into fifth position behind offerings from local rivals Huawei, Oppo, Vivo and Xiaomi, analysts said.

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