Tools and Weapons: The Promise and the Peril of the Digital Age

by Brad Smith

While other American companies are present in China, only Apple with its iPhone has enjoyed success in the country on a level that is comparable to its leadership in the rest of the world. In recent years, Apple has earned three times as much revenue as Intel, which is the number two US tech company in China.6 When it comes to profits, the situation is likely starker. Apple may well generate more profits within China than the rest of the American tech sector put together. It’s a notable accomplishment but also a challenge for the company, given China’s large contribution to Apple’s global profitability. As we’ve found at Microsoft over time and more globally with products like Windows and Office, anytime you’re dependent on a particular source for a large share of revenue or profitability, it makes it difficult to contemplate changes in that area. It also explains why Apple’s leaders are such frequent visitors to Beijing.