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Apple Plans Further Investment in China as Cook Visits

Cook had “great meetings” with Chinese officials, Carolyn Wu, a Beijing-based spokeswoman, said by phone yesterday, without identifying the officials. Cook earlier in the day posed for photos with customers at Apple’s store in the Joy City Mall in Beijing’s Xidan shopping area.

China is Apple’s second-largest market after the U.S., Cook said in October. His visit comes almost three months after crowds threw eggs at another Apple store in Beijing’s Sanlitun district when it didn’t open on the first day of sales for the iPhone 4S. Demand for the iPhone in China was “staggering” and the company “didn’t bet high enough,” Cook said Jan. 24.

“Apple has done a great job with the relatively small number of retail stores they have got here,’” David Wolf, CEO of Wolf Group Asia, a Beijing-based marketing strategy consulting firm, said in an interview yesterday. “The challenge now is to extend the successful retail model they have in the U.S. to China. Now they are really still in a test phase. It’s time to take it broader.”iAuUkWBxD3C0

Since opening its first store in Sanlitun in 2008, Apple now has two stores in Beijing; three in Shanghai and one in Hong Kong, for a total of six. That’s fewer than the 25 stores that then-head of retail Ron Johnson projected over two years on Feb. 25, 2010. Johnson left Apple last June to become J.C. Penney Co.’s chief executive officer.

‘Greater Investment’

“China is very important to us and we look forward to even greater investment and growth here,” Apple’s Wu said yesterday, without providing further details.

In addition to adding retail stores, other areas for investment may include increasing Apple’s “very thin” staff in China, Wolf said. Cook may also consider whether to own manufacturing or research facilities in China, he said. Foxconn Technology Group, the world’s biggest contract manufacturer of electronics, makes the iPhone in China for Apple.

Apple, the world’s most valuable company, almost doubled its potential customer base for the iPhone this month when it signed a second carrier, China Telecom Corp. (728), in the world’s largest mobile-phone market.

China Telecom at the end of February had 41.2 million subscribers on its third-generation network who could use the iPhone to surf the Internet for games and videos. China Unicom (Hong Kong) Ltd. (762), the nation’s first carrier to offer the iPhone, had 45.9 million 3G users.

Court Battle

China Mobile Ltd. (941), the world’s largest carrier by customers, does not offer the iPhone with a service contract, and its homegrown 3G network is incompatible with the device. Still, China Mobile had 15 million iPhone users on its 2G and Wi-Fi networks, the company said this month.

Apple is waging a court battle for rights to the trademark for its iPad tablet computer in China with failed Hong Kong- listed display maker Proview International Holdings Ltd. (334) Apple has appealed a November court ruling that its 2009 contract to buy the iPad name in China from Proview’s Taiwan unit was invalid because the mark was owned by Proview’s Shenzhen unit.


 


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