On September 1, John Ternus ascends to the role of Chief Executive Officer at Apple, effectively concluding Tim Cook’s illustrious 15-year tenure at the helm of the world’s foremost consumer technology enterprise.
Throughout Cook’s era, Apple’s relationship with China has been particularly emblematic. Factories across the nation operated by renowned Global 500 corporations such as Foxconn and Luxshare have produced the iPhones that catapulted Apple into its global dominance.
Moreover, the eagerness of Chinese consumers to purchase Apple gadgets has rendered China one of the company’s vital markets. Cook frequently traveled to Beijing, engaging with high-ranking officials and visiting Apple outlets and key partnerships nationwide.
“There is a Chinese proverb I cherish: ‘A single tree does not make a forest,’” Cook remarked earlier this year at the China Development Forum, a summit orchestrated by Beijing.
“Together, I believe we can plant that forest.” Tim Cook, Apple’s Chief Executive Officer, participates in the China Development Forum in Beijing on March 24, 2024.
It remains ambiguous how much experience Ternus possesses regarding China. Apple’s announcement regarding his appointment omits any mention of specific global markets, China included.
In fact, references to global markets are predominantly linked to Cook’s new position as executive chairman, which will entail “engaging with policymakers around the world.” Ternus’s LinkedIn profile offers scant information regarding his connections to China.
Ternus steps into a China business that has emerged from a challenging phase; however, daunting obstacles persist, stemming from a protectionist U.S. administration and a complex relationship with Beijing, not to mention a Chinese consumer landscape that exhibits wavering loyalty towards Western brands.
China’s Significance to Apple
Much of Apple’s extensive supply chain is anchored in China—a strategic decision primarily attributed to Cook, who first encountered Terry Gou, founder of Taiwanese manufacturer Foxconn, in 2000.
This meeting catalyzed a decades-long partnership, wherein Foxconn and other original equipment manufacturers assembled iPhones in sprawling factories, including the renowned “iPhone City” in Zhengzhou.
Workers during their lunch break at a Foxconn facility in Zhengzhou, Henan province, China, on Thursday, January 6, 2023.
Nevertheless, the COVID pandemic’s disruptions, characterized by China’s stringent lockdowns that jeopardized iPhone supply chains, compelled Cook to diversify production, pivoting towards manufacturing bases in India and Vietnam.
Additionally, the trade tensions instigated by former U.S. President Donald Trump expedited these strategic shifts, prompting Cook to assert a commitment to establishing assembly lines for servers and Mac mini computers domestically.
“Supply chain execution will serve as the defining early test of Apple’s next CEO,” asserts Nabila Popal, a senior director at the data and analytics division of International Data Corporation (IDC).
“The success of Ternus’ tenure may hinge on his ability to advance Apple’s ‘China-plus-one’ strategy without inciting political or commercial fallout in China, all while maintaining momentum in a market that is indispensable to Apple’s future.”
A Substantial Consumer Market
In the 2025 fiscal year, Greater China—a collective term encompassing mainland China, Hong Kong, and Taiwan—accounted for $64.3 billion in revenue for Apple.
Although this figure marks a slight decline from the previous year, it solidifies China’s status as Apple’s third-largest market. To contextualize this, Apple’s revenue from China approaches that of Boeing’s entire global operations.
For the past three years, Apple has seen a decrease in sales within China as competition from domestic titans like Huawei and Xiaomi intensified.
Compounding this challenge, Beijing has directed state-owned enterprises and government agencies to curtail their reliance on Apple devices.
Fortunately, the introduction of the iPhone 17 has revitalized Apple’s prospects, with Greater China revenues surging to $25 billion in Apple’s most recent quarter, a leap from $18.5 billion the previous year.
Cook declared this to be “the best iPhone quarter in history in Greater China” during an earnings call with analysts. Shoppers encounter an advertisement for the iPhone 17 Pro in Shanghai’s Xintiandi area on February 19, 2026.
Data from IDC for the first quarter of 2026 positions Apple as the second-largest smartphone vendor in China, boasting a 19% market share. This represents a significant improvement from the previous year, where Apple languished in fourth place, trailing behind Huawei, Oppo, and Vivo.
“Apple’s remarkable resurgence in China can be attributed to the extraordinary success of the iPhone 17,” notes Popal.
While new hardware played a pivotal role, the device’s distinctive orange hue—affectionately termed “Hermès Orange” by consumers—has rekindled interest among Chinese buyers.
“Such nuanced design modifications that signal ‘I possess the latest iPhone’ are incredibly influential in stimulating demand, particularly in a brand-conscious consumer environment such as China,” Popal adds.
Furthermore, the ongoing memory crisis is offering Apple a competitive edge over its Chinese adversaries.
Amidst fierce competition from AI firms and device manufacturers competing for limited supplies from select chipmakers, Apple’s financial might enables it to outbid competitors—“a luxury that many Chinese counterparts simply do not possess,” Popal emphasizes.
Reports indicate that Apple plans to unveil its first foldable iPhone later this year. Foldable devices are rapidly gaining traction in China, propelled by advancements in durability and slimness, alongside shifting consumer preferences that favor larger screens for video consumption and productivity.
According to IDC’s Popal, this release could “propel Apple into a market segment it previously conceded to competitors and challenge Huawei—currently the leading firm in foldables both globally and within China.”
Chinese Innovation
At present, Apple’s AI service, Apple Intelligence, remains unavailable in China. The nation mandates that AI applications receive approval from the Cyberspace Administration of China, presenting significant hurdles.
Despite Apple forging partnerships with local tech giants like Baidu and Alibaba to facilitate regulatory acceptance, these efforts have proven ineffective.
Conversely, domestic smartphone manufacturers are racing ahead with AI integration in their products.
ZTE recently introduced a prototype using ByteDance’s Doubao AI to perform tasks via voice command, while Honor is set to launch a “robot phone,” equipped with a gimbal camera designed for dynamic user interaction.
Lei Jun, Chairman and CEO of Xiaomi, stands beside the company’s electric vehicle, YU7, at the Beijing Auto Show on April 24, 2026.
Notably, one of Apple’s Chinese rivals has achieved what the American giant could not: entering the automotive market. After extensive deliberation over the auto industry for nearly a decade, Apple ultimately abandoned its car project due to concerns regarding profitability.
Conversely, Xiaomi, under the leadership of Steve Jobs admirer Lei Jun, persevered with its electric vehicle ambitions, launching its inaugural car in 2024.
Since then, Xiaomi’s vehicles have resonated with Chinese consumers, culminating in the delivery of half a million units. (Ford CEO Jim Farley has expressed admiration for Xiaomi’s endeavors.)
The success in electric vehicles has, in turn, positively influenced Xiaomi’s smartphone sales, as consumers perceive this achievement as proof of the company’s innovation bona fides.
Source link: Fortune.com.
