Apple to Build Research Lab in Shenzhen, China... "Expanding R&D Investment"

Apple, facing sluggish iPhone sales in China, announced plans to add and expand research facilities in Shanghai and Shenzhen.

According to China’s First Financial Daily on the 12th, Apple stated that it will expand and add new laboratories in Shanghai and Shenzhen to provide support for intelligent manufacturing, product reliability, quality, and material analysis. Apple plans to strengthen the capabilities of its existing Shanghai-based laboratory and establish an additional lab in Shenzhen by the end of this year. Through this, Apple aims to improve collaboration with local suppliers and conduct testing and research on products such as the iPhone, iPad, and Apple Vision Pro.

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According to Apple’s official announcement, the headquarters’ investment in research laboratories in China has exceeded 1 billion yuan (approximately 182.6 billion KRW), and with the additional establishment in Shenzhen, the related scale is expected to grow further. Guo Wei, Apple’s Vice President and General Manager of the Greater China region, described the new research facilities as "world-class facilities that will support delivering the world’s best products to users."

The existing laboratories are generally located close to production bases. Engineers share expertise on production processes with partners and coordinate work in real time. An industry insider told First Financial Daily, "Apple originally had an R&D team in Shanghai," adding, "This is an important step to further expand R&D and a process of regional research."

Apple’s R&D investment reaches hundreds of billions of dollars annually and continues to increase in scale each year. Last year, it was estimated at $30 billion (approximately 39.315 trillion KRW), a 14% increase compared to the previous year. Apple’s R&D budget includes investments in software and features for existing products such as the iPhone.

China is considered one of Apple’s most important markets. Over 95% of Apple products are manufactured and assembled in China, which has also influenced Apple’s channel establishment in the country. JP Morgan expects the share of Chinese supply chain companies in Apple’s iPhone manufacturing to expand from 7% in 2022 to 24% in 2025.

This R&D investment announcement comes amid sluggish iPhone sales in China. Apple is set to open its eighth store in Shanghai, "Apple Jing’an," on the 21st. This will be the 47th Apple Store in China. Apple’s revenue in China for Q4 last year was $20.8 billion, down 13% year-over-year. According to Counterpoint Research, iPhone sales in China declined by 24% during the first six weeks of this year.

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