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Apple Opens New R&D Center In China, Bolstering Relations With Shenzhen's Tech Community

15 October 2016, 9:03 am EDT By Horia Ungureanu Tech Times
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Apple bolstered its ties with Chinese manufacturing partners by announcing a new R&D center in the country. The facility will be established in Shenzhen, which already houses important names from the mobile industry.  ( Feng Li | Getty Images )

Apple is planning to open up a second research and development center in Shenzhen, making it the second city to receive the company's attention after the $45 million facility built in Beijing.

Shenzhen used to be famous for its knockoff iPhones and iPads, but the Chinese manufacturing hub has started to resemble Silicon Valley more and more. The latest evidence is Apple's intention to deploy a research and development center in the tech hub.

To underline the importance of the development, Apple's helm, Tim Cook, flew to Shenzhen this Tuesday, Oct. 11 to celebrate the new center.

Economic Daily, a local news outlet that Quartz translated, reported that Apple's leader commended Shenzhen for its manufacturing capabilities.

"We realized the skill level of Shenzhen's factories was gradually leading other places in the world," Cook said.

Josh Rosenstock, a spokesperson for Apple, explained in a statement that the Shenzhen facility will enable his company to make sure that engineers are cooperating "closely and collaboratively" with partners from the manufacturing side.

One additional plus of the Shenzhen center is that it will permit Apple to bolster its relationship with local partners. Having two R&D centers in the country should turn Apple into a magnet for talented techies from across China.

It may not be a coincidence that Apple is expanding its presence in the country.

iPhone sales are decelerating significantly in China, and Apple aims to make sure the trend is reversed.

The revenues of the company in Greater China (which includes Hong Kong and Taiwan) plummeted 33 percent during the Q2 2016 when doing a year-over-year comparison. Last year, Greater China ranked as the second biggest market for Apple. This is the worst and the most troublesome signal of all Apple's operating markets.

The low income indicates that the local customer is less interested in the iPhone, as native companies such as ZTE and Huawei are rolling out affordable products that chip away at Apple's fan base.

It should be mentioned that both ZTE and Huawei already have headquarters in Shenzhen, just as drone manufacturer DJI. That should help Apple keep a close eye on its rivals and last, but not least, have a healthy pool of experts to recruit from.

Apple's first R&D center in the country was announced by Tim Cook this August and will be built in Beijing, where it will open up 500 jobs.

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