Apple's Tim Cook Heading to China to Improve Relations With Leaders

NEWS ANALYSIS: Cook's latest trip to China comes at a critical time for Apple and aims to resolve recent tough economic moves by the Chinese government.

Apple, China, iPhones, revenue, privacy, security, censorship, iTunes Movies

Apple CEO Tim Cook will travel to China later this month for talks with government leaders as the company works to resolve ongoing crackdowns and sales disruptions in what is its second-largest market in the world.

Cook's trip is one of many he has made to China since becoming Apple's CEO five years ago, but this one is more significant because of actions taken against the company in recent months, according to a May 6 story by Reuters.

Cook's upcoming visit was revealed in an interview with an unnamed source who is familiar with the matter, the article reported.

"During his China visit, Cook (pictured) plans to meet senior government and Communist Party leaders—including officials in charge of propaganda, said the source, who declined to be named as the plan is not public yet," Reuters reported.

Several IT analysts, asked about the upcoming trip, told eWEEK that the CEO's visit comes at a critical time for the company.

"China remains a huge problem for U.S. companies in general," Rob Enderle, principal analyst of Enderle Group, wrote in an email reply to an inquiry. "Thanks to the Snowden disclosures, U.S. technology is broadly distrusted and the recent actions between the FBI and Apple have only fueled that fire, so [Communist] Party leaders [in China] have largely stopped using any U.S.-built technology and Apple products aren't held in as high esteem as they once were."

This kind of situation "showcases an increased need for a diplomatic function in U.S. firms below the CEO," Enderle added. "Cook's status and logistics experience will certainly come into play here, but this reflects poorly on the senior Apple staff in China who should have been able to handle things like this. Cook is taking the effort, but given the problems are largely outside of Apple's control, it is doubtful he can do much to fix them. This is an area where even Jobs would have struggled."

Jan Dawson, chief analyst of Jackdaw Research, said Cook's visit "isn't going to turn around iPhone sales, which is the single biggest issue for Apple at the moment in China and elsewhere, but it's worth remembering that Greater China is one of Apple's most important regions, and so visiting the business there and rallying the troops is something that Cook is going to want to do regularly regardless of whatever else might be going on."

Charles King, principal analyst at Pund-IT, told eWEEK:"Apple's size and influence, and the importance of China to its current and future success, makes Cook's trip comparable to a visit from a head of state."

Not only is China a huge market for Apple's products, but the company is "also directly or indirectly responsible for tens of thousands of Chinese manufacturing jobs so it makes sense to reach some form of détente," said King. "The challenge is that the pair are on opposite sides of several serious issues, including Apple's focus on securing/encrypting customer data and China's desire to promote homegrown technologies and vendors."

Economic instability and embarrassing revelations about China's ruling class in that country "have empowered various hardliners, making it uncertain to know just how much resistance Cook will experience during his visit," wrote King. "He also needs to avoid cutting a deal that results in Apple providing to the Chinese government information it has refused to give to U.S. government security agencies."

Thomas Husson, an analyst with Forrester, said the most significant issue for Cook's visit is that Apple has "doubled down on privacy" and that move could be a topic of discussion with Chinese leaders, who are concerned about privacy issues. "There might be some regulations coming down in the Chinese market. That would make sense to me."