Apple CEO Tim Cook is said to have signed the agreement in 2016 to avoid regulatory constraints from the Chinese government.
In the mid-2010s, Apple CEO Tim Cook increased business travel to China. Forging close ties with senior Chinese politicians, he managed to obtain favors, materialized through this deal. According to a long report revealed by the site The Information, resulting from a large-scale investigation, the CEO of Apple would have signed in 2016 a non-binding five-year agreement with the Chinese government. Its amount: $ 275 billion.
Tim Cook’s master stroke
This colossal amount of money was used by Apple to “develop the most advanced manufacturing technologies” and “to support the training of high-quality Chinese talent.” The agreement, signed by the Cupertino company, is in just 1,250 words. In return, Apple was able to bypass many restrictions imposed by the Chinese government on foreign companies. Restrictions would have had significant negative effects on the operations and activities of the Apple brand in China.
Among the other clauses of the secret deal, Apple promised to “use more components from Chinese suppliers” in its computers and mobile devices, to sign agreements with software companies, to collaborate with universities, and to invest. in Chinese technology companies. R&D centers and renewable energy production infrastructure were also paid for with part of Apple’s money.
It worked
Thanks to the deal, Apple was able to keep the data encryption keys for iCloud users in China, rather than handing them over to Chinese companies. The American computer firm has also complied with requests for the removal of content and applications that would go against the interests or priorities of China.
Apple has thus been able to build a solid relationship with the world’s second-largest power, to continue manufacturing and distributing its digital products and services there. China accounts for 19% of Apple’s total sales, growing since 2020, and is also said to be the country’s leading smartphone brand, which is crazy about the iPhone.
A tacit renewal
The existence of this agreement has remained unknown until today, but Apple has repeatedly been criticized for withdrawing applications that interfered with the interests of the Chinese government without putting up resistance. Each time, Apple replied that it was limited to obeying the laws in force. This agreement could be tacitly renewed for an additional year, namely until May 2022. Unless one of the parties disagrees.
In the end, the genius of Steve Jobs resided mainly in his faculty to pave the way and to popularize new products, while Tim Cook, who succeeded him in 2011, has the merit of having made Apple an ultra -profitable by strengthening its presence in the four corners of the world. Even where, like in China, it can be very complicated.