Apple to build two new Chinese R&D centers, spend $507M on research

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in General Discussion
Apple on Friday announced plans to set up two new research centers in China, spending a minimum of 3.5 billion yuan -- $507 million -- on research institutions overall.




Centers in Shanghai and Suzhou will join the ones already in the works for Beijing and Shenzhen, Apple said on its Chinese website. All four facilities will open later in 2017.

Apple said it expects the centers to help Apple cooperate with local partners, and attract talent from both its supply chain and the country's best universities. The company also highlighted its internship programs at schools, which it hopes will "develop the next generation of entrepreneurs."

The timing of the announcement is likely deliberate, as CEO Tim Cook is due to speak at an economic forum in Bejing on Saturday, Bloomberg noted. The executive will likely meet with various high-level government officials Apple needs to impress.

China has become an increasingly tough market for Apple, with declining iPhone sales and problems with store closures and censorship. The phone market has become tougher largely because of the surge of local brands, which can offer smartphones at lower prices.

On Thursday a U.S. think tank backed by Apple, the Information Technology & Innovation Foundation, called on a host of countries to put pressure on China and force it to provide business terms more favorable to international corporations. These include backing away from some of its "Made in China 2025" initiatives, and exerting less control over data.

Comments

  • Reply 1 of 18
    twa440twa440 Posts: 26member
    Does anyone else think this is a terrible idea? They might as well just send any developments directly over to the Huawei corporate offices.
    lkruppravnorodomwatto_cobra
  • Reply 2 of 18
    why invest all this money in china? Why not build these r&d facilities here in the USA? And recruit talent from US universities? 
    twa440mobirdlkruppravnorodom
  • Reply 3 of 18
    emig647emig647 Posts: 2,353member
    In previous articles us engineers have stated that we just don't have the turnaround that China has. They can produce a one off part quicker and cheaper than we can. Often they are coming up with a design and having to ship it off to China to produce that prototype. Perhaps this will save in that area??

    It does suck though. 

    It sounds like it may be a political move for Apple as well. Find a way to get into the tough China market. 
  • Reply 4 of 18
    Hopefully they don't research anything important there. 
  • Reply 5 of 18
    lkrupplkrupp Posts: 4,608member
    why invest all this money in china? Why not build these r&d facilities here in the USA? And recruit talent from US universities? 

    Probably as a condition to continue to do business in China. The Chi-coms don’t mess around. They are heavy handed and in your face.
  • Reply 6 of 18
    macxpressmacxpress Posts: 2,635member
    I don't know why Apple keeps spending all of this money in China. China is not Apple's friend and continuing to spend Billions there isn't going to change that. China would go against Apple today if it were any benefit to them. 
    tokyojimuwatto_cobra
  • Reply 7 of 18
    SoliSoli Posts: 2,568member
    why invest all this money in china? Why not build these r&d facilities here in the USA? And recruit talent from US universities? 
    1) A global company should look for the best talent around the globe.

    2) Haven't you heard that non-US citizens with valid work visas or who look too brown are having issues getting into the US? Hell, even US-born citizens are being stopped because of their skin color and weird names. Sidd Bikkannavar was in Chile and he's Indian. That happened a month into the current regime, so who knows what's going to become of this country when we're attacking citizens that look like immigrants and shooting people in front of their home because of the hat they're wearing.

    3) Apple—and every other major tech company—has R&D and other facilities around the world. This is a smart move for Apple—for any tech company.
    edited March 17 GeorgeBMacapple jockeyslprescottmontrosemacsravnorodomration al
  • Reply 8 of 18
    why invest all this money in china? Why not build these r&d facilities here in the USA? And recruit talent from US universities? 
    Because the talent is over there....   Why fight H1-B's when you can just move the whole operation to where the talent and the infrastructure is?
    ... The days of "cheap Japanese transistor radios" are gone....

    The east is, in every way, competitive with the U.S.  And, in many ways more than competitive.
    ravnorodom
  • Reply 9 of 18
    If Apple is playing the long game, they might do better to spend this money in India, where there is an increasing population and a new openness to foreign investment and business.
    watto_cobra
  • Reply 10 of 18
    SoliSoli Posts: 2,568member
    Vergilius said:
    If Apple is playing the long game, they might do better to spend this money in India, where there is an increasing population and a new openness to foreign investment and business.
    Apple isn't opposed to India, but this isn't an either/or scenario. China will be a much better market for Apple revenue and profit over India for the foreseeable future, so it makes perfect sense to increase their Chinese infrastructure. That's the bottom line, not population size, otherwise there wouldn't be so many large, dense cities around the world that have no Apple Stores while small college towns in the US do.
    edited March 17 Rayz2016
  • Reply 11 of 18
    seankillseankill Posts: 295member
    why invest all this money in china? Why not build these r&d facilities here in the USA? And recruit talent from US universities? 
    Because the talent is over there....   Why fight H1-B's when you can just move the whole operation to where the talent and the infrastructure is?
    ... The days of "cheap Japanese transistor radios" are gone....

    The east is, in every way, competitive with the U.S.  And, in many ways more than competitive.
    Competitive at stealing IP, that's for sure.
    watto_cobra
  • Reply 12 of 18
    pk22901pk22901 Posts: 99member
    "Why invest all this money in china? Why not build these r&d facilities here in the USA? And recruit talent from US universities?"

     
    Remember: "We rob banks because that's where the money is."


    Tech grows some R&D in China because that's where most of the developer and engineer babies are.


    And perversely, since Trump is making it unattractive for foreign babies to work and live here, offshore R&D will grow because that's where the engineer and scientist babies are (especially since DeVos education is being implemented).


    For the most part more and more of the educated babies are not white male
    Americans. (But America first!)
    SoliGeorgeBMacmontrosemacsration al
  • Reply 13 of 18
    tokyojimutokyojimu Posts: 280member

    If Apple thinks will will prevent China from destroying their business in that country, I'm afraid they are pouring money down the drain. China has long publicly appealed to its citizens not to buy Japanese products, and just this week they are stoking hatred of Korea and closed hundreds of Korean department stores. One wrong move on the part of the U.S. and Tim's dreams of long-term megaprofits in China are gone in a flash. 

    ravnorodom
  • Reply 14 of 18
    flaneurflaneur Posts: 4,347member
    seankill said:
    why invest all this money in china? Why not build these r&d facilities here in the USA? And recruit talent from US universities? 
    Because the talent is over there....   Why fight H1-B's when you can just move the whole operation to where the talent and the infrastructure is?
    ... The days of "cheap Japanese transistor radios" are gone....

    The east is, in every way, competitive with the U.S.  And, in many ways more than competitive.
    Competitive at stealing IP, that's for sure.
    This isn't the context to raise that sore-loser claim.

    When it comes to advanced production technology in display manufacturing, or even quick turnover in processor prototyping and fabrication, for just two examples, the US has nothing to steal. All that production expertise is in Korea, Japan and China. Get over it. The US gave up the race fifty years ago, and the current mindset reflected by your comment, and the mindset of the current "administration," is going to make the situation worse.

    Fortunately, at least Tim Cook and a few other supply-chain people at Apple and in silicon valley know how to work with Asia to get their ideas made into hardware. 
    GeorgeBMacmontrosemacstmaywatto_cobraration al
  • Reply 15 of 18
    flaneurflaneur Posts: 4,347member
    tokyojimu said:

    If Apple thinks will will prevent China from destroying their business in that country, I'm afraid they are pouring money down the drain. China has long publicly appealed to its citizens not to buy Japanese products, and just this week they are stoking hatred of Korea and closed hundreds of Korean department stores. One wrong move on the part of the U.S. and Tim's dreams of long-term megaprofits in China are gone in a flash. 

    So don't make wrong moves. 

    I suspect Tim Cook's long strategy has less to do with exploiting China for profit, and more to do with "making great products to improve [Chinese] people's lives." That would be the only way to legitimately proceed with this different-but-equal culture, and Tim Cook is way smart enough to proceed on that clear-headed, honest basis. 
    dsdmontrosemacsration al
  • Reply 16 of 18
    macxpress said:
    I don't know why Apple keeps spending all of this money in China. China is not Apple's friend and continuing to spend Billions there isn't going to change that. China would go against Apple today if it were any benefit to them. 
    Your last sentence answer your first sentence's question.

    Apple's reason: strengthening ties with Chinese universities and businesses will help China see that its own success is tightly aligned with Apple's success.  China won't hurt Apple if that means hurting itself.
    apple jockeyGeorgeBMacwatto_cobraration alRayz2016
  • Reply 17 of 18
    why invest all this money in china? Why not build these r&d facilities here in the USA? And recruit talent from US universities? 
    Apple has massive amounts of investment in R&D and office space in the US.

    1) 850,000 sq ft - campus 1 - Cupertino
    2) 3.3 mil sq ft in multiple buildings in Cupertino
    3) 2.8 mil sq ft - campus 2 - Cupertino
    4) 777,000 sq ft - campus 3 - Sunnyvale
    5) 4.6 mil sq ft - campus 4? - San Jose

    thats just from a quick search. Granted most of #2 will probably fold into #3. But that still leaves 9 mil sq ft that they mostly own with the rest on long term 10 yr plus leases.

    how much more should or will need here? That's a massive amount of corporate office/development/R&D space.

    As others have mentioned with the current political atmosphere around visa's plus over 90% of their cash on hand is sitting oversea's. It makes sense to build facilities abroad.

    they have facilities in Seattle, Texas, Arizona, North Carolina that I know of plus all the Apple stores. Over 100k employees in the US alone.

    until the visa process becomes predictable, repatriation becomes an option etc. they seem to have the lions share of development here already. A  R&D/development facility in almost every country they have stores is inevitable over time.

    they have or are setting up facilities in Ireland, India, Malaysia, Japan that I know of and now China. I could see them setting up facilities in Vancouver in the near future.

    its understandable to feel that way on the surface of the announcement. But taking the whole picture of what they have or committed to build here. I don't feel they are neglecting the US for jobs or facilities at the moment.
    ration al
  • Reply 18 of 18
    There are Apple R&D facilities in China, Japan, India and Israel. Beside U.S, these countries also breed the next generation of talented people. Apple makes a smart move by utilizing them. Apple is in the process of seeking something beyond iPhone, watch and Mac. Apple's world domination begins....
    edited March 17 watto_cobra
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