Apple CEO Tim Cook recently concluded his most extensive Southeast Asia (SEA) tour in years, visiting Vietnam, Indonesia, and Singapore from April 15-19.
While the visits were brief, his meetings with the government leaders of these countries highlighted the purpose of this visit: to seek new growth markets and manufacturing sites to offset Apple's ongoing struggles in China.
Cook's X (formerly Twitter) account has painted the trip as one where he met with local content creators and communities, but media reports pointed out that Cook has repeatedly stressed the SEA region's importance as both a market and emergent manufacturing base. In meetings with government leaders, Cook discussed furthering collaboration between Apple and their respective countries, ranging from additional investments for manufacturing to AI talent cultivation.
Meeting government leaders
The first stop of Cook's trip was to Vietnam, where he met with Prime Minister Phạm Minh Chính. Pham pointed out that Apple has already created over 200,000 job opportunities in Vietnam in recent years. Cook stated that there will be increased cooperation with Vietnam, including buying more components and accessories from Vietnam's suppliers, a big boost to the country's goal of becoming a global manufacturing hub. Apple claimed it has invested approximately US$15.8 billion in the Vietnamese supply chain since 2019.
Cook's next stop was in Indonesia, where he met with President Joko Widodo, popularly known as "Jokowi." Cook stated that they "talked about the president's desire to see manufacturing in the country," and has referred to the investment ability in Indonesia as "endless." The meeting with Cook is part of Jokowi's efforts to shift global manufacturing supply chains into Indonesia amidst geopolitical tensions.
The country has already secured investments from automakers Hyundai and BYD. Besides Cook, Jokowi also met with Tesla CEO Elon Musk in 2022 and may meet Microsoft CEO Satya Nadella at the end of this month.
Cook's last stop on his trip was to Singapore, where he met Prime Minister-elect Lawrence Wong and his predecessor Lee Hsien Loong (Update: Lee couldn't attend the meeting due to catching the flu). Apple's relationship with Singapore runs deep, dating back to more than 40 years ago when Singapore manufactured Apple II PCs in the 1980s. Over the decades, Singapore has evolved to a point where it now serves as a key hub for Apple in the Asia-Pacific region.
Right before the meeting with Wong, Apple announced on its website that it plans to invest US$250 million to expand its Ang Mo Kio campus, with a focus on expanding the AI talent pool. The company stated that it already employs more than 3,600 people in Singapore and the expansion "will provide more space for new roles in AI and other functions." In the statement, Cook referred to Singapore as "truly a one-of-a-kind place," and that they "can't wait for many more decades of innovation to come."
Struggles in China and geopolitical concerns
Cook's visit highlighted the company's growing emphasis on the SEA region, and it is largely due to the company's sluggish performance in the Chinese market and growing geopolitical tensions between China and the US.
Apple's reliance on China has never been a secret, both as one of its largest foreign markets and its primary manufacturing/assembly site where its devices are produced. However, the company's biggest money maker, the iPhone, has been struggling in the Chinese market. According to Bloomberg, iPhone shipments in the Chinese market saw a 19% YoY decrease in the first quarter of 2024, the steepest for Apple since the COVID-19 lockdowns in 2020.
One of the factors contributing to the decline is the return of Huawei in the high-end smartphone market, which was further exacerbated by geopolitics as the Chinese government bans the use of iPhones in government agencies and state-owned companies. This ban gave domestic brands like Huawei another boost in prospects and cast further uncertainty on Apple's prospects in China.
To offset its struggles in China, Apple has been seeking out other markets. Among them is India, which has recently replaced China as the most populated country in the world. Tim Cook met with Indian Prime Minister Narendra Modi in April 2023 as the company began to expand and shift some of its manufacturing to India. A recent report from Bloomberg stated that Apple is already assembling around 1 in 7 of its iPhones in India, totaling an output of US$14 billion.
Following the conclusion of another highly-publicized trip and meetings with government leaders by Tim Cook, it's likely safe to assume that the SEA region will undergo a similar increase in investments and attention from Apple in its quest to maintain growth without relying too much on the fickle market that is China.
