Beijing and Shenzhen. Shanghai and Suzhou. One in Hyderabad. Three in Jakarta.
Mark Hibben touched a raw nerve in a post Saturday on Seeking Alpha. Surveying Apple’s recent press releases, he counted eight new R&D centers built or promised in major Asian cities—four in China, one in India, three in Indonesia.
Breaking into new markets in Asia is never easy, and for multinationals it often requires greasing the local wheels of power. What’s paying off for Apple, Hibben says, is something he calls “constructive engagement.”
This has consisted of dialog with political leaders and a certain amount of judicious largess in the form of local investments.
Is Apple’s “largess” the usual wheel-greasing or something different? Both sides are well represented in Hibben’s comment stream, but “Wiseyou”—a regular who identifies him/herself as a Rutgers University professor—brings facts to the argument:
While it may make the provincial governments happy to have Apple investing in their local economy, this is not fluff research…
Apple recently announced that Siri can speak Shanghainese. Apple must have put a lot of effort into teaching Siri Shanghainese. If Siri learns to speak Cantonese, this would boost sales in Hong Kong and Southeast Asia where many people still speak Cantonese. Likewise, it Siri speaks Fukienese, it would be more popular along the southern coast and in Taiwan. In my opinion, one reason why many Chinese don’t use Siri is because it is simply not that great in recognizing Pudonghua and its many accents. Many of the accents really stem from the dialects. By training Siri in the various dialects, Siri may be able to recognize and speak the Pudonghua better. I believe that more Chinese would use Siri when it gets as good in Chinese as it is in English.
Character recognition is actually quite good and accurate on the iPhone but they need to do it for the Apple Watch. The Apple Watch face is actually just the right size to write a character and Chinese characters take so little space that the watch is not a bad place to so Chinese messages, aphorisms, and tweets.
Finally, a lot of work needs to be done to improve GPS navigation in China. Since Apple is in China and Google is not, this is one place where Apple Map can beat Google. There are so many new stores, services, gas stations, and restaurants in China, this represents a huge advertising market for Apple.
So, there is good reason for Apple to invest in research and development in China.
My take: Apple, as usual, is playing the long game.