Apple to Open Two New Research Centres in China

Apple is looking to establish a couple more research centers in China as demand for the iPhone continues to face stiff competition from local tech companies.

Apple plans to invest CNY3.5 billion ($677 million CAD) in research and development in China and set up additional research hubs in Shanghai and Suzhou, after already committing to build facilities in Beijing and Shenzhen.

“We are looking forward to working with more local partners and academic institutions through the expansion of R&D centres in China,” Dan Riccio, senior vice president of hardware engineering at Apple, said in a press release.

The announcement comes ahead of Apple CEO Tim Cook‘s visit China in order to attend a high-profile business forum in Beijing on Saturday. The three-day China Development Forum 2017 will see Chinese government officials and business people meet with leaders of global corporations, including IBM and Royal Dutch Shell.

Although iPhones remain popular among the Chinese, Apple recorded its first ever annual decline in smartphone sales in China last year.

China is the second largest iPhone market but Apple faces tough competition from cheaper locally manufactured smartphones. This, coupled with persistent macroeconomic weakness, caused Apple revenues to decline 12% year over year in the Greater China region to $16.2 billion in the last reported quarter.

The US tech giant’s sales have been hit with growing competition from local vendors Huawei, Oppo and Vivo whose increasingly high-tech offerings have been received well especially by customers in smaller Chinese cities.