What kind of game did Cook play at Apple's Huajian R&D Center?

Recently, Apple announced that it will open R&D centers in Shanghai and Suzhou, China. Following Beijing and Shenzhen, Apple has opened four R&D centers in China. Apple has pledged to invest more than 3.5 billion yuan in R&D centers in China. In addition to the capital investment, Apple is said to further expand its engineering and operations teams.

As for why Apple established a research and development center in China, Dan Riccio, Apple's senior vice president of hardware engineering, said that through the plan to expand the research and development center in China, Apple looks forward to collaborating with more local partners and academic institutions.

Cook also said: "The most important reason for carrying out these tasks in China is China's talent. It can be said that China's talent is China's strength." Cook said.

Apple's frequent establishment of R&D centers in China is to cultivate technical experts in the supply chain and acquire local talents. As part of Apple's continued development and investment in China, Apple also wants to help the next generation of entrepreneurs develop.

The US immigration visa policy hinders Silicon Valley giants from acquiring talent

Of course, we know that an important background at present is that after Trump became the current US president, the United States began to tighten and restrict its immigration policy, which caused trouble for Silicon Valley technology giants in recruiting talents to the United States.

For example, many IT companies in Silicon Valley cannot enter the country because they do not have H-1B visas. Many IT companies in Silicon Valley are also complaining that the H-1B visa quota system is not conducive to attracting outstanding talents to the United States. Based on this sense of crisis in attracting talents, many Silicon Valley giants are currently considering opening branches in other countries to cast a wide net and attract talents.

Facebook established a branch in Vancouver, Canada a long time ago. Canada is even taking advantage of the current immigration policy of the United States to create a favorable environment. It has made a fuss about the H-1B visa issue in Silicon Valley and built giant billboards to directly recruit high-tech companies and talents from Silicon Valley to enter Canada at the gate of Silicon Valley.

Therefore, the most direct reason why Apple has opened a large number of R&D centers around the world is that it can recruit outstanding local talents to develop regional markets and avoid the restrictions on talents and tax issues imposed by US immigration policies.

China's Internet innovation has attracted Cook's attention

Another reason is the innovation of Apple's Internet ecosystem. As we can see from Apple's investment in Didi last year, China's Internet innovation has attracted Cook's attention and vigilance. Cook, who is good at supply chain management but lacks product thinking, obviously also wants to make his products more adaptable to the habits of Chinese users.

Therefore, by establishing a research and development center in China, Apple can localize its products and make its product innovation closer to the habits of local Chinese users. For example, based on the launch of WeChat mini-programs, Apple also has a sense of crisis. This sense of crisis is manifested in the opening of the AppStore recharge card flagship store on Tmall, selling AppStore recharge cards and recharge codes, and conducting promotions. A prerequisite for localized innovation is to obtain Chinese talents, so as to better promote the development of localized software ecosystems, channel strategies, and marketing strategies.

For Apple, mobile phones are gradually not selling well in the Chinese market, but software revenue is growing strongly. In the third quarter of last year, China surpassed the United States for the first time and became the world's largest sales market for Apple's application software, with sales revenue reaching a record $1.7 billion. In addition, Apple currently regards AR as an important innovation direction, which requires iOS developers to continuously provide new ideas and develop innovative applications. At present, in the Apple application software store in China, game products are still the main source of income. For example, in November last year, the App Store fully connected to Alipay, allowing Chinese users to make software payment transactions more conveniently.

Compared with hardware revenue, software services have more room for imagination, which is why Apple tends to emphasize software service revenue and developer interests. Of course, on the other hand, in the Chinese market, various application innovation forms and entrances, including mini-programs, continue to emerge. Super entrances will weaken and reduce the frequency of users installing and opening apps, which is also an important reason why Apple attaches importance to iOS developer innovation.

Data shows that Apple operates 22 offices and 46 retail stores in Greater China, with more than 12,000 direct employees. According to data released by Apple, the company has created and supported 4.8 million jobs in China, including 1.8 million iOS developers and other positions related to the iOS ecosystem, accounting for more than one-third of the jobs in the Chinese market. It can be seen that the cultivation and support of local iOS developers is a top priority for Apple's future strategy.

At present, the innovation ability and strength of Chinese iOS developers and related talents are not inferior to those of other countries and regions. Therefore, Apple needs to further increase its software revenue in the Chinese market and consolidate its own iOS camp by strengthening the localized iOS ecosystem and improving its innovation capabilities.

Strengthen offline sales channels

Another factor is offline channels. Currently in the domestic market, Xiaomi, OPPO and Vivo are making careful efforts to develop offline channels. Lei Jun’s “small goal” is to build 1,000 “Mi Homes” in China in the next three years. Huawei has also set a goal of opening 15,000 new Huawei retail stores around the world. OPPO and Vivo occupy the largest offline channel market. Although Apple continues to open Apple retail stores in China, in general, Apple’s offline sales channel layout in China is still too lacking compared with the domestic wolf pack.

An obvious fact is that in the Chinese market, most Apple users purchase Apple products through Apple's online e-commerce channels. However, as domestic mobile phone manufacturers vigorously expand their offline channels, it also means that Apple's market space and consumer awareness are being squeezed. As consumers pay more attention to the on-site perception and experience of new products, Apple's strategy naturally needs to change accordingly.

For Apple, the R&D center is more of a core base. As the core base expands, there may be further expansion of offline channels. The purpose of attracting local personnel is to strengthen the cooperation and layout of local sales channels and build a localized channel and marketing system. This is also Apple's natural response to the current crisis in the Chinese market.

Fighting a good public relations war and constraining the supply chain system of Chinese local mobile phone manufacturers

2017 marks the 10th anniversary of the iPhone. For Apple, this is a battle that cannot afford to fail and requires an all-out effort. It must create a hit product, cultivate its brand image in the Chinese market, and play a good public relations card, rather than leaving the impression that Chinese consumers are just making money and then leaving.

In the Chinese market, a big shortcoming of Apple in the past few years has been that the gap between Apple's marketing strategy in the Chinese market and that of local manufacturers is too large. While domestic manufacturers are constantly engaged in fancy marketing wars, offline channels are constantly expanding, and online Internet marketing and emotional marketing, celebrity endorsements, and advertising continue to bombard, Apple is basically voiceless in the Chinese market.

While WeChat and Alipay are waging a subsidy war and rapidly sweeping the market through offline merchants promoted by city service providers, Apple Pay pales in comparison with the former two in terms of market response speed, ability to promote and execute cooperation with offline merchants, and marketing capabilities.

On the other hand, Apple is also in urgent need of strengthening its ties with Chinese suppliers. In the entire supply chain of Apple, Apple is increasingly dependent on the supply chain of the Chinese market. A large part of the jobs created and supported by Apple in China come from suppliers. Foxconn has about 1.2 million employees, most of whom work in mainland China. In addition, Foxconn's huge investment of 61 billion yuan in Guangzhou at the end of last year also shows that the supply chain market in mainland China still has great potential.

At the same time, Apple's strengthening of its ties with the supply chain is also aimed at hindering Chinese mobile phone manufacturers from cultivating their own supplier systems in the local market. In China, Huawei, OPPO, vivo and other manufacturers are also building their own supply chain systems. Taiwan's MediaTek, Largan, Innolux, Honghui and other suppliers are also Huawei's suppliers. Huawei's HiSilicon processors have also begun to be manufactured by TSMC. OPPO has its own factory, and the production lines in the supply chain are also gradually improving and expanding. Apple has realized that its supply chain position is threatened and needs to strengthen its control over the Chinese supply chain.

A sense of powerlessness in not being able to accurately grasp the pain points of Chinese consumers

For Apple, its more important task is to build a localized team that meets the needs of the Chinese market and has a deeper understanding of users. This team should be able to penetrate the supply chain, software and hardware research and development, marketing, and the construction of a new offline channel system outside of retail stores, and have an in-depth understanding of the pain points of consumers in the Chinese market.

So we saw that in October last year, Cook announced that Apple would establish a research and development center in Shenzhen, which is divided into five major sectors: supply chain management, operations, research and development, and online and offline retail, involving industries such as manufacturing and App development. Therefore, Apple needs to attract more local talents to promote this strategy through such a layout of the research and development center, and even to carry out in-depth cooperation with more Chinese technology and Internet companies.

That is, with the R&D base as the root and the Apple retail store as the point, we will spread out to deploy localized offline channels and marketing teams, and attack based on the consumption pain points of Chinese users at the software and hardware levels. Only in this way can we fight a local marketing, public relations and supply chain battle that is closer to Chinese consumers.

Apple's establishment of a research and development center in China is nominally a talent strategy and cooperation with local universities. Behind it, it reveals Cook's anxiety about Apple's loss of fans in the Chinese market and a sense of powerlessness in not being able to grasp the pain points of Chinese consumers. Apple is making its own changes and efforts. In the face of the rapid deployment of Apple's research and development center, how domestic manufacturers can further respond is also a question that many manufacturers need to think about next.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.