Technology

Report: Apple CEO Tim Cook has negotiated a secret $ 275 billion deal with China

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Apple CEO Tim Cook announces new products in the company’s livestream on April 20, 2021.

Today, The Information released an in-depth report detailing Apple CEO Tim Cook’s efforts to forge strong relationships between Apple and Chinese government officials and agencies.

The report cites both interviews and direct access to internal Apple documents about Cook’s repeated visits to China in the mid-2010s, and describes a $ 275 billion deal in which Apple pledged heavily into technology infrastructure and training in China Land to invest.

The non-binding five-year contract was signed by Cook during a visit in 2016 and was partially closed to mitigate or prevent regulatory measures by the Chinese government that would have had a significant negative impact on Apple’s operations and business in the country.

The information describes the nature of the Chinese government’s priorities contained in the 1,250-word deal:

They included a commitment to help Chinese manufacturers develop “the most advanced manufacturing technologies” and “support the training of high-quality Chinese talent”.

In addition, Apple promised to use more components from Chinese suppliers in its devices, to sign agreements with Chinese software companies, to work with Chinese universities on technology, and to invest directly in Chinese technology companies … Apple promised to invest “many billions of dollars more”. than what the company has already spent annually in China. Some of that money would go towards building new retail stores, research and development centers, and renewable energy projects, the agreement says.

So far, Apple has largely kept its end of the deal, and the article describes exceptional cases where Apple has benefited from its strong relationship in successfully circumventing restrictions that would normally be imposed on foreign companies.

For example, the encryption keys for iCloud user data for the region are controlled by Apple, despite government efforts to encourage, urge, or force foreign companies to transfer responsibility for this data to Chinese companies. On the flip side, Apple’s commitment to abide by the Chinese government’s rules and guidelines was part of the deal, and Apple has often complied with requests to de-list apps and content that run counter to the state’s priorities and goals .

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China is one of the largest and fastest growing consumer markets in the world, but its economy and government operate by completely different rules and values ​​than corporations in capitalist Western democracies. Hence, such deals are not uncommon for foreign companies operating in China, although they are not always so secret.

Chinese officials have attempted to highlight the health of local and national businesses in the past, and have sometimes imposed or announced intentions to enact regulations that dramatically hinder foreign companies to ensure the success of Chinese companies. Foreign companies often have to go out of their way to ensure that their success is shared with local companies in order to avoid these results.

Apple outperformed most comparable American tech companies in China, and the report makes it clear that this is in large part due to Cook’s lobbying, business dealings, and relationship building. In fact, Cook’s strength in this area has been so critical to Apple’s global success that some members of Apple’s leadership are concerned about the company’s future success if Cook resigns in the future.

In other words, while former Apple CEO Steve Jobs is best known for effectively pioneering and popularizing new product categories, Cook is ultimately most remembered for making Apple a more progressive, efficient, and profitable global company than Apple ever to do before. If so, then thanks to this type of dealmaking and a strong mastery of supply line logistics. (Cook was also the chief architect of Apple’s current product supply chain, which is deeply rooted in China.)

The information states that China accounts for 19 percent of Apple’s total sales, four points more than just a year earlier. It also cites data from Counterpoint Research that said Apple recently became China’s largest smartphone brand.

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