Apple’s partnership with China has evolved into one of the most consequential alliances in modern tech history. From the moment Apple first tapped into Chinese manufacturing in the early 2000s, the company’s fortunes and China’s industrial ambitions became inextricably linked. Today, China is both the world’s primary assembly line for Apple products and one of its largest consumer markets, responsible for roughly one-fifth of the company’s global sales. To appreciate how this mutual dependence came to be, let’s explore the key milestones in Apple’s China story.
Building the Manufacturing Foundation
Apple’s engagement in China began in 1999, when it selected Foxconn (Hon Hai Precision Industry) as its assembly partner for the iMac. That relationship soon expanded to include iPods, and by the mid-2000s it encompassed the iPhone—launching a new era in large-scale electronics manufacturing. Foxconn’s sprawling Chinese campuses in Zhengzhou, Shenzhen, and elsewhere became the epicenters of Apple’s production. To meet soaring demand, Apple also brought on board other assemblers such as Pegatron, Wistron, and Luxshare. By establishing its supply chain foothold, Apple turned China into “the world’s iPhone factory,” and today nearly all iPhones are assembled on Chinese soil.
Apple’s impact on China’s manufacturing landscape went beyond simple assembly contracts. By insisting on exacting design and quality standards, Apple effectively raised the bar for local suppliers, accelerating China’s transition from low-cost assembly to sophisticated component production. Federal Reserve economist Yi Wen aptly observed that Apple’s approach “spearheaded the development of the world’s most sophisticated manufacturing supply chain” in China. Companies that once made basic phone cases or simple boards began mastering intricate camera modules, display technologies, and even semiconductors. Over time, homegrown firms—like Luxshare, BYD, and YMTC—emerged as key players, manufacturing everything from metal casings to memory chips for Apple and other global brands.
Scaling Up Investment and Research
Although Apple’s capital deployment in China is primarily channeled through contract manufacturing, the company did make direct investments to cement its presence. In 2017 and 2018, Apple announced four new research and development centers—located in Beijing, Shenzhen, Shanghai, and Suzhou—totaling 3.5 billion RMB (about $509 million). These R&D hubs employed over a thousand researchers, giving local engineers firsthand experience with Apple’s advanced design philosophies and encouraging domestic suppliers to adopt global best practices.
Apple’s willingness to commit substantial resources to China extended beyond R&D. In 2016, as sales growth in the Chinese market began to slow, CEO Tim Cook reportedly inked a five-year pact pledging up to $275 billion in various investments across China’s technology sector. While details of this agreement remain partly confidential, it signaled Apple’s readiness to support Chinese innovation. One visible outcome was a $1 billion investment in Didi, China’s leading ridesharing platform—an unusual but strategically resonant move, given Didi’s prominence in China’s digital ecosystem. Meanwhile, Apple also funded clean-energy projects for Chinese suppliers, aiming to create more sustainable manufacturing facilities throughout China’s tech hubs.
Economic Footprint and Job Creation
By 2024, Apple’s network of factories, suppliers, and corporate offices was enormous. Foxconn alone employed more than 1.2 million workers in China at its peak, though rising automation has gradually reduced that number. Apple itself maintained direct operations—13,600 employees in offices, retail stores, and corporate functions by the end of 2018—and had established nine wholly owned companies and 71 branch offices across China. Altogether, Apple’s ecosystem “supported” over five million jobs in China, according to figures frequently cited by CEO Cook and Chinese state media. This tally included factory line workers, employees at component suppliers, app developers on Apple’s App Store, and retail staff.
The economic ripple effects were substantial. Almost every finished iPhone—over 200 million units per year—shipped from China to markets around the globe, contributing billions of dollars in export value. In customs data, this led to a curious discrepancy: Chinese export statistics for “smartphones” far exceeded recorded foreign earnings, a gap largely explained by the value-adding impact of Apple’s assembly operations. At the same time, the fees paid by Apple to Chinese factories injected a steady stream of foreign revenue into local communities, fueling growth in cities like Zhengzhou and Shenzhen.
Tapping China’s Consumer Power
While Apple’s manufacturing presence in China has long been a cornerstone of its global strategy, its retail and service expansion has unlocked equally significant opportunities. In 2008, Apple opened its first China store in Sanlitun, Beijing. Over the next decade and a half, this network grew steadily: by the end of 2018 there were 51 Apple Stores on the mainland, and by January 2025 that count had risen to 58. Each flagship store—in Shanghai, Hefei, and other major cities—employs 70–100 staff and attracts millions of visits per year. These stores aren’t merely sales outlets; they serve as prestige showrooms that reinforce Apple’s premium brand positioning and offer localized services such as installment plans, trade-in programs, and native-language support.
China has consistently ranked among Apple’s most lucrative markets. In fiscal 2018, Greater China (comprising mainland China, Hong Kong, and Taiwan) generated about $53 billion in revenue, roughly 20% of Apple’s $265 billion total for that year. By fiscal 2023, the region’s sales had climbed to $72.6 billion—still about one-fifth of Apple’s nearly $383 billion global revenue. Even when currency fluctuations trimmed growth in 2024, Greater China accounted for $66.95 billion in sales (17% of $391 billion), producing $27.1 billion in operating profit—nearly a quarter of Apple’s worldwide profit for that period. Although competition from domestic smartphone brands intensified—Apple’s market share dipped from around 20% in 2019 to roughly 15% by the end of 2024—its high-end positioning kept it firmly in the game. Apple remains the leader in China’s premium segment, while local challengers like Vivo and Huawei dominate midrange and budget tiers.
Challenges and Ongoing Adaptation
Despite its success, Apple faces mounting headwinds in China. In 2024, iPhone shipments fell by 17% across the market, and in the crucial holiday quarter (Q4), sales plunged 25%. A saturation of smartphones, aggressive pricing from rivals, and shifting consumer preferences all contributed. In response, Apple has rolled out targeted incentives—expanded trade-in credits, zero-interest financing, and country-specific features such as localized payment services—to keep customers engaged. It has also doubled down on services growth: iCloud subscriptions, the App Store ecosystem, Apple Music, and other digital offerings represent potential avenues for recurring revenue, with roughly 1.8 million registered iOS app developers in China as of 2017.
On the manufacturing front, Apple must navigate geopolitical pressures and supply chain diversification. While China will remain critical for assembly, Apple has begun moving a fraction of production to India and Vietnam—a trend largely driven by tariff concerns and supply chain resilience. Still, China’s unparalleled infrastructure and skilled workforce make it difficult to replicate its capacity elsewhere. As a result, Apple’s Chinese partners continue to refine automation and advanced manufacturing techniques to maintain cost advantages.
Looking Ahead
Today, Apple’s China story is one of deep interdependence. The symbiosis—Apple gains low-cost scale and access to hundreds of millions of affluent consumers, while China climbs the value chain and creates millions of jobs—has defined both parties’ trajectories for more than two decades. As we look toward 2025 and beyond, this relationship will likely evolve rather than dissolve. Apple will continue to innovate in camera modules, display technologies, and chip design alongside Chinese suppliers, while local consumers will decide whether Apple remains their aspirational brand of choice. For China, preserving high-tech manufacturing prowess is now a national priority—one that depends in part on nurturing partnerships with global leaders like Apple. In the end, Apple’s China journey offers a powerful illustration of how two economic powerhouses can influence each other, shaping the future of technology, jobs, and trade on a global scale.