Apple CEO Tim Cook is said to have signed a $275 billion deal with China to operate without a hit.
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| CEO Apple Tim Cook. Photo: Guardian |
According to The Information,Apple signed a 1,250-word memorandum of engagement in 2016 with China's National Development and Reform Commission. The five-year deal, in which Apple agreed to assist China in creating advanced manufacturing technologies, using a variety of components from suppliers in the country, prioritized contracting with local software companies, and invested directly in Chinese technology companies. Apple has also embarked on research with universities and trained skilled human resources for the country.
In addition, it has promised billions of dollars to build R&D facilities, open more retail stores and implement renewable energy projects.
Based on the documents obtained, The Information estimates Apple's deals are worth about $275 billion over about 10 years. If the two sides do not object, the agreement will automatically renew for one year and take effect until May 2022.
Apple's move comes after China restricted foreign companies and services to the mobile market in 2016. iPhone, iPadApple Pay, iCloud and the App Store are said to be in the crosshairs. In fact, according to the Telegraph,Apple's product sales were badly hit but rebounded in 2016.
Apple has not commented.
According to CNet,it's unclear how much of Apple's massive operations are. Last year alone, for example, it spent nearly $22 billion on global R&D operations and nearly $44 billion on its operating costs. In addition, Apple relies heavily on the world's most populous country. Many iPhone, iPad and Mac parts are made in China. The company also relies largely on manufacturers in the country such as Foxconn to assemble its products.
China is Apple's second most important market after the United States. The company has repeatedly made concessions in China, including agreeing to place an iCloud server there, allowing authorities to track some of Chinese users' data, opening 11 retail stores, and adding Luxshare Precision Industry to iPhone 13 production.
Via CNet
