Apple CEO Tim Cook is heading to China this month, according to a report from Reuters, to meet with "high-level government officials" including those in charge of "propaganda." Such a visit would be business as usual for Cook, but the meetings might be of increased significance this time, as Apple faces declining revenue in China — its second-largest market after the US.
Last month, Apple's iBooks Store and iTunes Movies services were shut down in the country on the orders of the government's media watchdog, the State Administration of Press, Publication, Radio, Film and Television. The two online stores were only launched six months previously, and their closure comes as China's President Xi Jinping seeks to consolidate government control of the web and media. This sort of intervention has apparently worried Apple's investors. Major shareholder Carl Icahn said last week that he had sold his stake in the iPhone maker, specifically citing worries about China that the government could "make it very difficult for Apple to sell there."
"China must improve management of cyberspace."
According to a report in The New York Times, after the shutdown of Apple's services, Xi met with tech leaders from domestic firms including Alibaba and Huawei. "China must improve management of cyberspace and work to ensure high-quality content with positive voices creating a healthy, positive culture that is a force for good," the president was reported as saying by Chinese state press.
Although Apple's online stores are not as profitable as its hardware, they still comprise a significant part of its business. Indeed, in the company's most recent earnings report, in which its revenue declined for the first time in 13 years, Apple's Services business actually grew. This category includes the sales of apps, music, books, movies, and more.
If Cook is traveling to China as Reuters reports, then it's to be expected that topics such as the closure of Apple's online stores will be on the agenda. "[We] may not have the wind at our backs that we once did," said Cook of the company's business in China during last week's earnings call, "but it's a lot more stable than what I think is the common view of it. We remain really optimistic on China."