Must-Read: : Apple in China: “Apple… with its model of status-delivering hardware differentiated by software locked to its devices…
…has been uniquely successful in the world’s most populous country. [And] for many years Apple’s model freed them from the usual hoops that most Western tech companies have had to jump through to get a piece of the irresistible Chinese market. For example:
- Microsoft spends $500 million a year in China, mostly at its Beijing R&D center (its largest outside of Redmond), and has promised to up that total after a recent antitrust investigation
- Cisco pledged to invest $10 billion in China last year after being increasingly frozen out from Chinese purchases after the Edward Snowden revelations
Qualcomm, after settling an antitrust case, formed a $280 million joint venture with a provincial government that included technology transfer- Intel has promised up to $5.5 billion to transform a chip plant that it originally said would be two generations behind to become cutting edge; a few months later the company formed a joint venture with two local firms in direct response to Chinese concern about reliance on foreign companies in the chip industry. That follows a previous $1.5 billion investment in two other chipmakers partially owned by the Chinese government
- Dell adopted a new strategy last fall predicated on partnering in China to the tune of $125 billion over five years, forming a joint venture with the Chinese Academy of Sciences, and deep partnerships with Kingsoft Corporation for work in the cloud ‘fully supporting and embracing the China ‘Internet+’ national strategy.’
The Internet+ strategy is a plan to integrate the Internet with traditional industries, but its introduction has gone hand-in-hand with an increasingly strong preference for Chinese technology from Chinese firms. Thus the partnerships, joint ventures, and investment. And yet, until now, the most successful American tech company in China has operated mostly without interference…