Apple did not respond to questions about the report at the time. Shenzhen, often referred to as China's Silicon Valley, is home to major Chinese tech companies like smartphone maker Huawei and social media giant Tencent, as well as a hub for countless factories that make electronics and hardware for consumer goods. Apple's R&D push in China comes as its momentum in the country begins to slow. Revenues for Hong Kong, Taiwan, and mainland China fell 33% annually last quarter, and the region is no longer Apple's second-biggest market. Meanwhile, Apple has attracted more scrutiny from the Chinese government—in April authorities forced it to shut down its iBooks and iTunes movie stores. The Communist Party wants to end its reliance on foreign technology, which bodes poorly for the hardware maker as it looks for fresh revenue sources beyond the iPhone.