Apple’s Tim Cook makes surprise China visit as iPhone sales slump

The whirlwind trip, which wasn’t announced ahead of time, has involved drop-ins at Apple stores, a visit to a key supplier and meetings with senior officials, including Chinese Commerce Minister Wang Wentao.

Cook’s visit to China—his second in roughly seven months—highlights Apple’s increasingly complex relationship with the world’s second-largest economy, which serves the company as a manufacturing hub and a vital consumer market, as well as being a source of significant risk.

Though Apple devices, in particular iPhones, remain popular in China, they face growing competition from domestic rivals and a sluggish consumer economy. At the same time, the company has to contend with increased suspicion of American technology companies among officials, fueled by intensifying geopolitical competition between China and the U.S.

According to Counterpoint Research, in the first 17 days of its release, sales of Apple’s most popular iPhone 15 models—the 15 Pro, 15 Pro Max and 15—fell 10% in comparison with similar iPhone 14 models last year.

The Wall Street Journal reported last month that authorities in China had ordered government employees not to use iPhones for work, and that Apple staff had been meeting with Chinese officials over new rules that will restrict foreign apps currently available on the Chinese version of the iPhone app store. Apple hasn’t commented on the ban or the new rules.

In his meeting with Cook in Beijing on Wednesday, Wang said China would continue to expand market access for foreign companies and was committed to creating a market-oriented business environment, according to an official readout. Cook said Apple cherishes the achievements of its 30-year presence in China, according to the readout.

“My trip to China is going exceptionally well,” Cook said in video footage of the meeting posted online by state media. On Thursday, the executive told China’s chief information technology regulator that Apple was committed to growing together with local suppliers.

Cook’s visit began Monday in the southwestern province of Sichuan, where Apple makes many of its tablets and laptops. The executive dropped in on a mobile-gaming tournament held at a local Apple store and watched grade-school children fly drones controlled with their iPads. He later traveled to eastern China to visit the factory of Luxshare Precision, a Chinese supplier whose role in assembling Apple products has grown rapidly over the past few years.

While questions linger over the future of Apple’s supply chain in China as the company moves to shift some production elsewhere, the consumer side of its Chinese business poses a more immediate concern.

iPhones were once so highly sought-after that Chinese consumers would stand in snaking lines outside Apple stores days ahead to buy them, but analysts say a sluggish economy has damped consumer demand.

“Chinese consumer sentiment has changed,” said Will Wong, a smartphone analyst with IDC. “China’s economy is different from the prepandemic period and consumers are more rational now with their spending habits. They are no longer rushing to be the first ones to get iPhones anymore.”

Meanwhile, strong competition from homegrown smartphone rival Huawei is taking the shine off Apple devices, despite new features such as titanium cases and better cameras. China Securities, a domestic brokerage, said in a note that Huawei almost doubled its share of China’s smartphone market in the month to Oct. 2, powered by the surprise release of its high-speed smartphone Mate 60 Pro series.

Some online resellers in China have begun to offer iPhone 15 devices for less than the original price, a reversal from years past when such phones sold at a premium in the gray market. Unlike previous versions of the device, the iPhone 15 didn’t make the list of the hottest topics on popular Chinese social-media site Weibo on its release day.

Counterpoint analyst Ethan Qi said Apple sales in China could still recover, as supplies of high-end iPhone models—typically the bestselling in China—increase.

Apple didn’t respond to a request for comment on iPhone sales in China.

Like many U.S. businesses, Apple also finds itself caught in the political crossfire between Beijing and Washington, with both governments increasingly giving priority to national-security concerns over commerce. Shares of Apple fell more than 3% after the news emerged that China was moving to ban the use of iPhones by central government employees.

The government iPhone ban showed Apple could be collateral damage amid U.S.-China frictions, said Han Lin, China country manager for the Asia Group, a business consulting firm.

“It’s a signal from the Chinese that even Apple isn’t untouchable,” Lin said.

China became Apple’s largest market for iPhones in the second quarter for the first time based on shipment data, according to research firm TechInsights.

Greater China accounted for around a fifth of Apple’s global revenue in the April-to-June quarter, making it the company’s third-biggest market after the Americas and Europe.

On Tuesday morning, as news of Cook’s China visit filtered out, the list of popular topics on Weibo included several related to Apple: the company’s lethargic sales in China, its weaker position versus Huawei and consumer complaints about a display problem with the latest iPhones.

In Sichuan, where Cook met the most senior Communist Party official in the region, he announced a donation of 25 million yuan, equivalent to $3.4 million, to the government-backed China Foundation for Rural Development, for rejuvenating China’s rural areas. That followed separate pledges earlier this year to support education and flood relief.

Cook said in a social-media post that the company had been working with the foundation for a decade to support rural development in Sichuan province.

Foreign businesses often use such donations to demonstrate their commitment to China and improve relationships with policy makers, as corporate social responsibility in China is often party- and government-driven, said Asia Group’s Lin.

“Apple is hitting two birds with one stone…They are appealing to the grassroots and aligning themselves to the goals of the party,” Lin said.

Write to Yang Jie at jie.yang@wsj.com and Liza Lin at liza.lin@wsj.com