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Cook Does China His Way

By John P. Mello Jr. MacNewsWorld ECT News Network
Mar 30, 2012 5:00 AM PT

Tim Cook this week made his first visit to China since he took the tiller as CEO of Apple last August.

Cook Does China His Way

Cook's trip to the Asian nation mixed business with politics. He visited a Foxconn factory that makes iPhones and an Apple Store in Beijing. He conducted skull sessions with the city's mayor, Guo Kinlong, and the country's Vice Premier Li Keqiang, who is expected to succeed Wen Jiabao as premier of the nation.

The junket is being widely interpreted as an effort by Apple to solidify its relations with China, which is the second biggest market for the company's iPhone.

In recent weeks, Apple has had some rough sledding in the country. A rash of stories about unsavory working conditions in Foxconn's factories has tarnished Apple's polished public image, and a Chinese company called "Proview" is in a court fight with the American firm over the ownership of the iPad trademark.

Oiling Supply Chain

Nevertheless, all things Apple remain popular in China, as can be seen in the brisk market for knockoffs of its products. Some ripoff artists have even gone so far as duplicating the physical appearance of Apple Stores. Others have just slapped Apple logos on products -- like stoves -- to see if they can cash in on the company's cachet.

While Apple CEOs have made overseas trips in the past, Cook's visit to China is different, especially since it's coming at a time when the man is still defining himself as a leader to many both inside and outside the company.

Because of his background in logistics, the trip is of particular importance to Cook from an operations point of view, according to Yankee Group Research Director Carl Howe.

"He recognizes that China is a critical part of Apple's supply chain today," he told MacNewsWorld. "So he's trying to keep that supply chain well-oiled."

"He's doing things differently from his predecessor, but that shouldn't surprise anyone because he's not the same person," he added.

Personable Approach

Cook may also be trying to leverage the potency of the Apple brand in way not done by his forbearers to gain a competitive edge in a country with enormous market potential.

"This trip is intriguing because China has become, not only for Apple, but for almost every major U.S. tech company, one of the new frontiers," Creative Strategies President Tim Bajarin explained to MacNewsworld.

"All of them are trying to find ways to expand their businesses into China, which is still a relatively untapped market for technology," he said.

The trip to China, he added, reflects Cook's personality as a business leader. "He tends to be a much more personable business leader and not a confrontational business leader," he noted.

"This type of a trip -- where he checked out stores and businesses and met with government officials -- suggests he'd going to be a much more hands-on CEO when it comes to international markets."

Discounting Jobs

One Apple watcher, though, was disturbed by Cook's China roadshow. "It's not something that Steve Jobs would do," Rocco Pendola, author of the Pendola Stock Option Newsletter, told MacNewsWorld.

While the trip may have been important, he acknowledged, the images emanating from the excursion should be disconcerting to Apple fans.

"You see him smiling, shaking hands with Chinese officials, it's reminiscent of what a politician would do," he said. "For me, that's the opposite of Jobs. That's scary for the long term."

Since Jobs' passing, the recognition of his importance to Apple seems to be fading, he maintained. People believe the company's success can go on forever because it's successful now under the helm of Cook.

"I can't buy that," he said. "It's not that Jobs was a great CEO. He made the people around him better, and that variable is gone."

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