Cover Story: The Cult of Apple in China

Can Apple navigate the opportunities and perils of the Middle Kingdom?

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In this week’s TIME magazine international cover story (available to subscribers here), TIME’s Beijing Bureau Chief Hannah Beech explores the complex relationship between two behemoths: Apple and China. It has been a big year for the house that Jobs built, particularly in the world’s second largest economy. Revenue tripled to $7.9 billion, a figure that accounts for about 20% of global sales, compared to only 2% in 2009. This commercial success has come with calls for Apple to clean up its act in terms of environmental protection and worker rights. But supply chain struggles are only part of the story. In China, “the cult of Apple is booming,” writes Beech.

An iPhone, the most popular Apple product by far, isn’t just a cool gadget; it’s a signifier of success. “Apple in China is a vanity product, not so much about functionality,” says Alan Guo, chairman of LightInTheBox.com, a China-based online retailer. “Because money was made so fast in China, rich people aren’t very secure, so they want an easy status symbol to show they’ve made it.”

Apple is known for its strategic prowess, but in China, Beech finds, the company’s growth “has been a lesson in how to prosper without really trying.” In fact, with minimal advertising and only six mainland stores, Apple has cultivated a near-fanatical fan base that celebrates the Americanism of the products (more customizable, and therefore more unique) rather than expecting a Sino-centric version.

“People in China buy Apple because it symbolizes an individualistic Western lifestyle,” says Yang Xi, a 29-year-old in Beijing who owns two Apple laptops, seven different iPods, an iPhone and an iPad. “In China, there are so many people. We like the idea of something that makes you special, that you can make your own.”

Apple CEO Tim Cook, who is leading his company’s charge into the Middle Kingdom, is willing to change some of the existing paradigms. For instance, Cook has cultivated a better relationship with the country than Steve Jobs managed. When Cook last met with China’s presumptive Premier, Li Keqiang, he enjoyed “a reception akin to that of a visiting head of state,” Beech writes. As other foreign firms flounder, Apple is finding its feet. If they can keep it up, they’ll be uniquely placed to prosper, and to re-make what ‘Made in China’ means.

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