Apple Inc. has a big problem on its hands and Tim Cook is riding out like a knight in shining armor hoping to save the firm from impending doom. Last week, Reuters broke the news that Tim Cook was headed to China to woo government officials in a bid to get Apple back on the track to profits in China.
Apple has made a $1B investment in the Chinese version of Uber, Didi Chuxing as part of plans to get a foothold in the Chinese auto market. Well, latest reports indicate that Tim Cook is in China for much bigger reasons than providing Didi with financial and moral support against Uber’s foray into China.
Tim Cook is in China to court government favors for Apple
Apple’s China’s problem has already cost the firm a great deal of money. In the first quarter financial reports, the firm revealed that its Q1 revenue crashed by 21% year-over-year to mark the first decline in 13 years. The decline in revenue could be traced to a 26% year-over-year drop in iPhone sales in Greater China.
Activist investor, Carl Icahn has given up on Apple because of the problems in China and he has sold all of his AAPL stock. He says, “You worry a little bit — and maybe more than a little — about China’s attitude,” Icahn said at the time, adding that China’s government could “come in and make it very difficult for Apple to sell there … you can do pretty much what you want there.”
It is no longer news that Apple makes its biggest sales outside of the U.S. in the Chinese market. The fact that China has been suffering from an economic downturn in the last couple of quarters has not boded well for the iPhone maker. More so, the Chinese government seems to be adopting some hostile policies that it makes it hard for Tim Cook to do business in China.
For instance, Beijing blocked access to Apple iTunes and iBooks Store last month as part of its censorship activities. Earlier this month, a Chinese court ruled in favor of a Chinese firm in a trademark dispute against Apple in the use of the “iPhone” brand. An official statement says, Apple is disappointed the Beijing Higher People’s Court chose to allow Xintong to use the IPHONE mark for leather goods when we have prevailed in several other cases against Xintong,”
iPhone 7 to the rescue
While Apple problems continue to mount up in China, Tim Cook seems to believe that he could reignite lost love for the iPhone with the launch of the iPhone 7. The consensus belief in the market is that the firm will release its new line of iPhone 7 in the autumn. Tech Times report that the firm will introduce two types of iPhone 7 – one with a 4.7-inch screen and the other with a 5.5-inch screen. The devices will be the thinnest ever with figures varying between 6.0 and 6.5 mm (0.23 to 0.25 inches).
Reports are still sketchy with lots of variation about the specs of the iPhone 7. However, pundits seem to agree that the device will be waterproof and that antenna bands will be eliminated from its backside. However, I am more interested in seeing the material that will displace the full-metal jacket that is synonymous to iPhone. Most people are of the opinion that the iPhone 7 might sport a new a contemporary material such as ceramic.