Apple to build data centers as it stakes claim in China

A customer is trying a new red iPhone 7 in Nanjing, East China's Jiangsu province, March 25, 2017. [Photo/VCG]

Apple Inc will invest $1 billion in new data centers in Guizhou province in China, as the United States tech giant steps up efforts to meet local consumers' growing demand for cloud services.

The move is part of a deal Apple inked with Guizhou provincial government on Wednesday.

Under the partnership, these data centers will be operated by Guizhou-Cloud Big Data Industry Co Ltd, an enterprise owned by the Guizhou provincial government.

Apple will register a business entity in Guiyang to help build the data centers and offer technology support, according to a joint statement.

Guizhou-Cloud Big Data Industry will also become the sole operating partner of Apple's iCloud service on the Chinese mainland.

The deal marks Apple's latest push to step up investment in China where it is facing mounting competition from rivals.

In March, Apple announced plans to build two 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.

The company also established two centers in Beijing and Shenzhen last year, highlighting the importance of the Chinese market, the world's largest smartphone arena where Apple is losing ground to local players such as Huawei and Oppo.

The California-headquartered company has committed to investing 3.5 billion yuan ($507 million) in these centers, which will seek graduates from China's leading universities including Peking University, Tsinghua University and Shanghai Jiao Tong University.