Quick Take: Apple Adds to Its R&D Investment in China

Apple Inc. is sweetening up its R&D investment in China, adding two more research and development centers to two ones earlier announced.

The two new centers will be in Shanghai and Suzhou, with the two others in the works for Beijing and Shenzhen. The company has committed to investing a total of 3.5 billion yuan ($510 million) in the four centers, which are scheduled to open later this year, Apple said in a statement.

The announcement of the two latest centers on Friday came in advance of CEO Tim Cook’s visit this week to China, where he is scheduled to speak at a major government conference.

Apple’s decision to build more R&D centers comes at a time it has shown signs of trouble in China. Its smartphone sales in China fell 12%, as it faced tough competition from Chinese competitors such as Oppo, Vivo and Huawei. Apple was the fourth-largest vendor of smartphones in the last quarter of 2016, according to consulting firm IDC.

Apple has fallen from its 2015 position as either the top or second largest smartphone vendor in the nation, according to IDC statistics.

When Cook visited Beijing last August, Apple revealed plans to open an R&D center in Beijing, which will employ 500 people. Two months later, Apple announced it would build another center in southern tech hub Shenzhen.

Apple said in the statement that it hoped to attract talented graduates from Peking University, Tsinghua University and Shanghai Jiao Tong University in the hope of developing experts to work closely with its regional supply chain. Apple currently employs 12,000 people in China through 22 offices and 46 authorized stores.

The Shanghai government was the first to publish guidelines encouraging foreign companies to establish R&D centers locally in 2015. Enterprises that set up research centers in the city, taking in talent from schools and institutes, were promised tax breaks and subsidies.

Contact reporter April Ma (fangjingma@caixin.com)