Tim Cook’s China visit reinforces country’s importance to Apple

Tim Cook touched down in Chengdu, China, this week for an Apple Store event tied to the company’s 50th anniversary; The visit comes at a pivotal moment in the iPhone maker’s complex relationship with the world’s largest smartphone market.

Tensions between the U.S. and China have been escalating, in part because of the Iran war and because the U.S. has announced a new investigation into China’s trade practices after the Supreme Court struck down President Donald Trump’s biggest tariffs, which included massive taxes on Chinese imports.

But China remains a critical market for Apple even as the company deals with mounting geopolitical challenges and mounting antitrust pressure there. Days before Cook’s visit, Apple reduced its China App Store commission on in-app purchases and paid transactions from 30% to 25% starting March 15. Apple also reduced fees for smaller developers and mini-app partners from 15% to 12%. One last week noteThe company attributed the changes to “discussions with the Chinese regulator.”

These aren’t the only concessions China wants from Apple.

People’s Daily, the official newspaper of the Communist Party of China, published a comment arguing that Apple should go much further. Analysis by TMTPost. The newspaper noted that Chinese users and developers still lack access to third-party payment systems and alternative app distribution, and called on regulators to continue pressuring Apple to open up its ecosystem.

Separately, China’s State Administration of Market Regulation is investigating Apple’s app fee policies and ban on external payment services. According to a report previously covered by CNBC.

As Apple approaches its 50th anniversary next month, its hardware business in China is thriving despite the odds.

iPhone sales in the world’s second-largest economy rose 23% in the first nine weeks of 2026, according to data released Thursday by Counterpoint Research. This figure is even more remarkable considering that the Chinese smartphone market fell by 4% annually during the same period. Apple’s sales in Greater China increased by 38% to $25.5 billion in the last quarter, driven by demand for the iPhone 17.

Separately, Apple COO Sabih Khan spent the week touring Chinese manufacturing partners. Visiting Sunwoda’s battery plant in Shenzhen and Foxconn’s assembly lines in Shenzhen and Chengdu, According to state news agency Xinhua.

Apple’s continued dominance in smartphones, with major support from China, is helping the company calm Wall Street, which has been waiting for attention from it on artificial intelligence.

The stock is down more than 8% this year, while the Nasdaq is down about 5%.

A Wall Street Journal analysis found that Apple is on track to generate $1 billion in AI revenue this year; Almost all of this revenue comes from subscription cuts for ChatGPT, Grok, Claude, Gemini and other productive AI apps sold through the App Store.

AppMagic pegged these fees at approximately $900 million in 2025, with ChatGPT alone covering three-quarters.

Apple hasn’t built a pioneering model of its own, Siri has progressed slowly, and Apple’s top AI executive, John Giannandrea, left last year. His replacement, Amar Subramanya, spent 16 years leading Google engineering for the Gemini Assistant before briefly running AI. MicrosoftIt provided Apple with its most reliable artificial intelligence acquisition in recent years.

As Apple tries to build a sustainable AI business, it may continue to rely on the iPhone as the front door to its most popular chatbots, charging a fee for usage no matter who wins that race.

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