A flagship store of Apple in Shanghai Photo: VCG

Apple is going to add a new store in downtown Shanghai on March 21, the latest move by the US tech giant to expand its operations in the huge Chinese market, despite rising competition from local Chinese brands like Huawei and Xiaomi.

The outlet is reportedly to feature a floral theme, decorated with special wallpaper designed for Apple devices. To celebrate its opening, the Shanghai Symphony Orchestra is invited to stage a live show on March 21, to be accompanied with various workshops, according to a statement on Apple China's website.

Apple Jing'an store will become the highest-standard Apple store in the Chinese mainland. According to media reports, the store covers an area of 3,835 square meters, with a total investment of 83.4 million yuan ($11.61 million). Only Apple's store on New York City's Fifth Avenue costs more.

Apple is expected to bring high-quality products and services to Chinese consumers, as the company faces increasingly fierce competition from a slew of Chinese local brands, industry insiders said.

Apple iPhones struggled in the Chinese mainland market in the first six weeks this year, with sales plunging by 24 percent year-on-year, a report by market research organization Counterpoint Research said on March 5.

Apple iPhones have faced stiff competition at the high end from a resurgent Huawei while getting squeezed in the middle by aggressive pricing from OPPO, vivo and Xiaomi, said Zhang Mengmeng, a senior analyst with Counterpoint. 

"Although the iPhone 15 is a good device, it has no significant upgrades from iPhone 14 series, so many consumers just feel fine holding on to the older-generation iPhones for now," Zhang said.

Apple CEO Tim Cook visited China twice in 2023, highlighting the importance of the Chinese market to the company, while acknowledging Apple's growth pressure.

Apple announced price reductions for its iPhone 15 series and older iPhone models in the Chinese mainland market between January 18 and 21 prior to Chinese Lunar New Year holidays.

In a related development, the compatibility descriptions of Apple products have been updated on its website, including the Apple Vision Pro, indicating that Vision Pro might soon enter the Chinese mainland market.

Apple's move is understandable since China remains its second largest market after the US, underscoring the company's confidence in exploring the massive Chinese market, Fu Liang, a Beijing-based tech analyst, told the Global Times on Monday.

However, Apple is likely to faces higher pressure of competition, as local Chinese smartphone manufacturers are racing to come up with new products in every price range, while Huawei's high-end chip supply is eased since the release of its flagship Mate 60 series in 2023, Fu said.

Fu said Apple needs to ramp up investment in research and development to make new technological breakthroughs and regain lost market share in one of the world's most important markets.