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

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Nathan Mattis / Ars Technica

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Today, the information published a long report Details of Apple CEO Tim Cook’s efforts to establish stronger ties between Apple and Chinese government officials and agencies.

Citing interviews and direct access to internal Apple documents about Cook’s repeated visits to China in mid-2010, the report described a $275 billion deal that would allow Apple to build technology infrastructure and training in the country. Committed to invest heavily in

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The non-binding, five-year deal was signed by Cook during a 2016 visit, and was created partly to reduce or prevent regulatory action by the Chinese government, which has a bearing on Apple’s operations and business in the country. had a significant negative impact.

The information details the nature of the priorities of the Chinese government involved in the 1,250-word deal:

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

In addition, Apple promised to use more components in its devices from Chinese suppliers, sign agreements with Chinese software firms, collaborate on technology with Chinese universities, and invest directly in Chinese tech companies… Apple promised to invest “several billions of dollars more”. Which the company was already spending annually in China. Some of that money will go toward building new retail stores, research and development centers and renewable energy projects, the agreement said.

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To date, Apple has mostly respected its share of the agreement, and the article details exceptional cases when Apple has benefited from strong ties in successfully bypassing limits that are usually imposed on foreign companies.

For example, encryption keys for iCloud user data for the region are controlled by Apple, despite the government’s efforts to encourage, coerce or force foreign companies to hand over responsibility for that data to Chinese companies. On the other hand, Apple’s commitment to comply with Chinese government rules and policies was part of the deal, and Apple has often complied with requests to remove apps and content that run contrary to state priorities and goals.

China is one of the world’s largest and fastest growing consumer markets, but its economy and government are governed by very different rules and values ​​than those of businesses in capitalist Western democracies. As such, such deals are not uncommon for foreign companies operating in China, although they are not always so secretive.

Chinese authorities have historically sought to emphasize the health of local and national businesses and have at times declared their intention to introduce or declare regulations that prevent foreign companies from wanting to ensure success for Chinese businesses. interrupts dramatically. Foreign corporations often must make a strong case that their success will be shared with local companies in order to avoid these consequences.

Apple has outperformed most comparable US tech companies in China, and the report makes the case that this is thanks in large part to Cook’s lobbying, dealmaking, and relationship building. In fact, Cook’s strength in this area has been so important to Apple’s global success that some members of Apple’s leadership worry about the company’s future success should Cook step down in the future.

In other words, while former Apple CEO Steve Jobs may be best-known for effectively pioneering and popularizing new product categories, Cook is ultimately tasked with transforming Apple into a more advanced, efficient and profitable global business than ever before. can be remembered for. If so, it would be such a bargain as well thanks to a strong mastery of supply line logistics. (Cook was also the chief architect of Apple’s current product supply chain, which has its roots heavily in China.)

The Information notes that China represents 19 percent of Apple’s total sales, up four points from a year ago. It also cites data from Counterpoint Research which states that Apple has recently become the largest smartphone brand in China.

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