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“Why the US bought the iPhone even if they beat it”… Apple signs $320 trillion confidential contract with China

picture explanationTim Cook, Apple CEO. [사진 출처 = 디인포메이션]

It is belatedly known that Apple CEO Tim Cook signed a secret contract worth 320 trillion won with the Chinese government four years ago.

The gist of the contract is to use more Chinese parts and utilize Chinese software to maintain Apple’s business in China. In addition, it is known that it contains a plan to invest in Chinese universities and companies.

According to The Information, an American IT media, on the 8th, Tim Cook signed a $275 billion (about 323 trillion won) investment attraction contract with the Chinese government in May 2016. The Information said that it confirmed this fact through internal Apple documents and interviews with officials.

According to reports, in 2016, then Tim Cook met with Chinese government officials who believed Apple was not contributing enough to the Chinese economy and signed a secret five-year contract after lobbying. The contract states that they will grow together with Chinese companies to achieve mutual benefits.

Specifically, instead of exempting from the Chinese government’s restrictions on various Apple services such as Apple’s App Store and iCloud, it supports Chinese manufacturers to develop manufacturing technology and supports Chinese talent training. It also includes using more parts from Chinese suppliers and signing contracts with Chinese software companies.

Part of the article on the secret contract between Apple and China reported by The Information on the 7th (local time). [사진 출처 = 디인포메이션]

picture explanationPart of the article on the secret contract between Apple and China reported by The Information on the 7th (local time). [사진 출처 = 디인포메이션]

In fact, Apple signed many contracts with Chinese companies during the contract period. In 2016, it announced that it had signed a contract with Xinjiang Kumpoong, China’s largest wind turbine manufacturer.

In 2017, it also announced that it would move its iCloud business to China. In 2018, it launched a clean energy investment fund worth $300 million (about 353.7 billion won) in China.

The contract period between Apple and the Chinese government is five years. However, unless otherwise specified, the contract also included details of an automatic one-year extension until May 2022, The Information explained. Accordingly, the effect is expected to be extended until May 2022.

American IT media Cnet analyzed that “This is how Tim Cook became a seasoned politician and built relationships with world leaders for Apple’s business.”

Meanwhile, China’s Huawei is struggling with pressure from the US government, but iPhone sales in China are steadily increasing.

According to Counterpoint Research, Apple overtook Chinese manufacturer Vivo to take the top spot in the Chinese smartphone market in October this year. This led to overall iPhone sales as the iPhone 13, released in October, recorded high sales. In October, Apple’s smartphone sales in China rose 46% from the previous month.

On the other hand, Samsung Electronics is completely ignored in China. The market share is still below 0%. The Chinese market is where Samsung, the number one player in the global market, is struggling the most.

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