Move part of effort to regain market share lost to local rivals

Apple Inc will set up a research and development center in China by the end of this year－its first independently-operated one in the Asia-Pacific region－as part of its efforts to regain market share it is losing to local rivals.

Apple CEO Tim Cook said on Tuesday that the US tech giant would step up its investments in China and be an active part in promoting the country's smart manufacturing and Internet Plus strategy, which are designed to advance the use of the internet in traditional industries.

Cook revealed the company's plan during a meeting with Vice-Premier Zhang Gaoli. Cook's second visit to Beijing within three months highlighted the importance of the Chinese market where the tech giant is wrestling with declining iPhone sales.

The company did not disclose the investment size for the new R& D center.

In a separate app developer event on Tuesday, Cook said his company would add more China-specific features to its mobile operating system, in a move to further differentiate its products.

The move comes as smartphones increasingly look and work the same, and services and software become increasingly important to help companies differentiate their products and win brand loyalty.

Currently, Apple's intelligent personal assistant Siri is learning ancient Chinese poems and when Chinese consumers speak some of their words, Siri will be able to recognize which poems they are from and tell users the names of the poets.

During his latest visits to China, Cook had extensive meetings with local developers, highlighting his emphasis on offering better services.

James Yan, research director at Counterpoint Technology Market Research, said: "Smartphone hardware is no longer Apple's edge, because local vendors such as Huawei Technologies Co Ltd are catching up quickly, and even outdoing Apple in hardware components, such as having dual cameras on one smartphone," Yan said.

In May, Cook said his company would speed up its efforts to let Chinese-developed mobile applications go global, as local developers raked in earnings exceeding $7 billion from the company's App Store.

Cook's visit also came ahead of the company's new iPhone launch, which will take place in the fall and is widely seen as the key to helping Apple regain its crown in China.

Jin Di, research manager at International Data Corp China, said during the visit Cook would probably discuss cooperation deals with retail partners, including telecom carriers.

"While local vendors all saw year-on-year growth in China in the second quarter, Apple continued to decline in its shipment volumes," Jin said.