Apple is opening a 300 million yuan ($45 million) research and development center in Beijing, its first ever in China.
On the surface, the idea of Apple opening an R&D center in China sounds logical, and possibly a really good call. If China is not Apple’s largest market it is certainly in the top three, and there are enough cultural and behavioral differences between China and, say, California that it would make sense to have a lab designed to make Apple products more “China-friendly.”
Adding a more urgent impetus would be the growing power of local electronics manufacturers like Huawei, Lenovo, and especially Xiaomi. In contrast with Apple’s “One Device to Rule Them All” strategy, the local players offer features and tweaks developed to match the lifestyles and wishes of China’s consumers. Xiaomi in particular has built a vast business by honing the ease-of-use of Google’s Android operating system to within a hair of iOS, and then adding thousands of enhancements suggested by fans. These tweaks, combined with slowing innovation from Cupertino, have helped locals eat into the iPhone’s former market dominance.
What is more, a series of government-backed measures over the past three years, ranging from attacks by state-owned media to the government-ordered shutdown of Apple’s iBooks store, are provoking speculation that Beijing may have it in for the company.
Against all of this, an R&D center seating 500 would seem to be a smart move.
What will dog Apple’s effort, though, is a justifiable degree of cynicism among both government and consumers in Beijing about whether this R&D center will do substantive research and development work, or whether it is so much window dressing. If all the center does is localization work, not only will Apple waste the opportunity to fully tap China’s pool of engineering talent, audiences in China will dismiss the center as so much PR.
The onus is thus on Apple. Unless the company offers frequent and convincing examples of genuinely innovative work being done exclusively in the China location, it will give local challengers a ready-made opportunity to discredit the iPhone maker with both the government and consumers. Rather than helping the company, it would serve to grease the rails in Apple’s decline in a strategic market.