Apple CEO Tim Cook is to fly out to China later this month to meet “high-level government officials,” amid worries over Apple’s prospects in the country, reports have claimed.
News of the trip was revealed by Reuters, which quoted a source familiar with the matter as its source, which added that Cook reportedly plans to meet senior government and Communist Party leaders – including officials in charge of propaganda, to look at improving the company’s profile in the country.
Last month Apple stunned Wall Street when its quarterly revenues fell for the first time in 13 years. This was mostly down to the fact that iPhone sales fell for the second consecutive quarter, down by 16 percent in the most recent quarter.
Apple said that sales had dropped from 61.2 million to 51.2 million year-on-year as device saturation took hold across most of its major markets. And even more worrying for Apple, sales fell by more than a quarter in China.
It is worth remembering that China is the world’s largest smartphone market, and is Apple’s second-largest market after the US, with its revenues in the country largely driven by the iPhone.
To compound matters, Apple also confirmed last month that its online book and film services had been shut down in China, only six months after their launch.
Indeed, so worried are some about Apple’s position in China, that activist investor Carl Icahn last week announced that he had sold his entire stake in Apple.
The billionaire said that he was concerned about China’s economic slowdown and was worried the Chinese government could make it very difficult for Apple to conduct business in that country.
Apple is not alone in this regard however. China is in the midst of an ongoing crackdown on foreign firms. In December Chinese president Xi Jinping warned the West that countries should respect one another’s “cyber sovereignty” and different internet governance models.
And this year the country introduced regulations that impose strict conditions for online publishing, including prohibiting foreign ownership and joint ventures in online publishing. Content must be stored on servers in China under the new regulations. The country also proposes to ban Web addresses not approved by Chinese authorities.
It should be noted that Apple already stores Chinese user data in China itself. In August 2014 it partnered up with China Telecom Corp to use its data centres in order to provide a faster service for its iCloud users in the country.
Apple also revealed in September 2014 that it had hired a local manager in China to deal with data requests from the Chinese government.
In March this year Apple revealed the nature of these data requests from the Chinese government. During the first six months of 2015, the Chinese government reportedly asked Apple for data on over 4,000 devices. It did not reveal how many requests it had compiled with.
All of this comes after Apple was accused by the US Department of Justice of making special deals in China. Apple of course famously refused to help the FBI unlock the iPhone belonging to a dead terrorist, responsible for the mass shooting in San Bernardino.
That decision will not have gone down well with Chinese authorities.
Apple has previously admitted that its servers in China store fully encrypted user data that can only be unlocked with an encryption key that’s held in the US.
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