Guizhou secures $1b Apple cloud center

A boy plays with an Apple device at an outlet of Apple Inc in Tianjin. [Photo provided to China Daily]

Apple Inc will invest $1 billion to build its first China data center in Guizhou province, in a move to meet local consumers' growing demand for better cloud services.

The move is part of a deal Apple signed with the Guizhou provincial government on Wednesday and came as the US tech giant intensifies resources to compete with local rivals.

The new data center will be located in Guian New Area, Guiyang. It will be operated by Guizhou-Cloud Big Data Industry Co Ltd, a company owned by the Guizhou provincial government. The company will be the sole operating partner of Apple's iCloud service in the Chinese mainland.

Apple will register a business in Guiyang to help build the data center and offer technological support, the Guizhou provincial government said.

Apple said that Chinese customers like using iCloud to store their photos, videos, documents and apps, and to keep them updated across all of their devices.

"The addition of this data center will allow us to improve the speed and reliability of our products and services," Apple said.

The company maintained that it has strong data privacy and security protection measures in place, and no backdoors will be created in any of its systems.

James Yan, research director at Counterpoint Technology Market Research, said Guizhou has invested heavily in developing the big data industry, making it a good choice for Apple.

"Setting up its own data center in China will also help the US company better manage consumers' data, analyze their behaviors and improve its services," Yan said.

The deal marks Apple's latest push to ramp up investments in China where it is losing ground to local competitors such as Huawei Technologies Co Ltd.

Apple said in March that it would build two more research and development centers in Shanghai and Suzhou, Jiangsu province, as part of its broad efforts to tap into the country's talent pool in manufacturing, design and app development.

It plans to invest 3.5 billion yuan ($508 million) in these R&D centers, including the already planned Beijing and Shenzhen centers.

Apple's China revenue fell 14.1 percent to $10.73 billion in its second fiscal quarter. But Yan, from Counterpoint, said the upcoming 10th anniversary edition of the iPhone will reignite Chinese consumers' enthusiasm.