US tech giant Apple will open a second research and development centre in China to focus on manufacturing and software development as it looks to increase its foothold in in the world’s second largest economy amid tough competition from domestic rivals.
The announcement to set up second R&D centre was made by Apple CEO Tim Cook during a meeting with top Shenzhen officials on Tuesday at the sidelines of 2016 National Mass Innovation and Entrepreneurship Week, according to sources with the municipal government.
Around 100,000 people are developing software for Apple in Shenzhen currently, Cook, who rated the quality of Shenzhen software developers’ products as top in the world said.
He said Apple planned to seize the worker advantage to increase investment on research, state-run Xinhua news agency reported.
China is Apple’s major overseas market.
But iPhones are facing growing challenges posed by Chinese competitors like Huawei, Oppo and Vivo.
During his visit to China in August, Cook unveiled Apple’s first research center in Beijing.
Shenzhen is China’s hi-tech hub, investing a whopping 4.05 per cent of its gross domestic product (GDP) into research and development, and hosting a number of top tech firms like Huawei Technologies Co
Ltd, and ZTE Corp.
Apple has established its first directly invested research and development centre in Beijing last month to develop advanced technologies.
It was established with registered capital of 100 million RMB, ($16 million) and the total investment is 300 million RMB ($50 million).
China is the largest smartphone market in terms of shipments. Apple currently placed in fifth position in terms of its mobile phones behind the local brands Huawei, Vivo, Oppo and Xiaomi which are now the top four smartphone makers in China with a combined market share of 53 per cent.
In the second quarter 111.2 million units were shipped, an increase of 4.6 per cent from the previous year’s June quarter.
Though dominated by local players like Huawei, Apple has built substantial market in China by expanding its net work of show rooms.
Observers say Apple looks to grab Samsung market in China as the Korean giant is grappling with crisis stirred by the faulty batteries.
The recall decision will have a big impact on Samsung’s plan to regain the top position in China,a ccording to Forbes magazine.
Samsung market share has dropped to less than 10 this year in Chinese market from about 20 percent in 2013 as local competitors rolled out cheaper products with better designs.
The company was banking on the Note 7 smartphone to revive consumers’ interest in the brand.