By Claire Zillman
September 25, 2017

She was promised dinner. In early 2008, Apple CEO Steve Jobs asked Isabel Ge Mahe over to his house to talk and share a meal. The invitation was part of Apple’s ongoing effort to recruit Mahe, who at the time was vice president of wireless software engineering at Palm Inc. The engineer-on-the-rise was hesitant to make a move. “I had built the wireless technology team for Palm pretty much from the ground up, and, at the time, we were trying to revive the Palm brand,” she says. Jobs, unsurprisingly, was unwilling to take no for an answer.
So he decided to make his pitch in person. Mahe was impressed with how “down-to-earth” the late Apple cofounder was face to face.

There was just one problem: Jobs never proposed that they eat, and no food ever materialized. “Just water for the whole two hours,” Mahe says, laughing at the memory. “So that was a little bit of a bait and switch!”

What he did offer was a high-profile new gig. Jobs wanted her to build a team to focus on the wireless capability of the iPhone, which Apple had released months earlier. At one point, Jobs pleaded his case with a parable of sorts. He told Mahe about his neighbor, a teenager who, in want of a Ferrari, had souped up his Volkswagen as the next best thing. In the end, though, all the neighbor had was a really loud Volkswagen. “He was trying to tell me that no matter what I do, Palm will always be Palm,” she says. Eventually, she opted for the ­Ferrari. Mahe started at Apple later that year.

Now Mahe, 43, is taking on a critical new role at Apple: In July, CEO Tim Cook named her the first-ever vice president and managing director for Apple in what it calls Greater China—the mainland plus Hong Kong and Taiwan. Apple’s other sales regions don’t have lead execs; the company prides itself on its “functional” structure, with teams grouped by what they do, not location. But it’s time for Apple to think different in China.

Apple

The world’s second-largest economy is crucial to Apple’s future—and right now the business there is headed in the wrong direction. In the most recent quarter, the China region accounted for 18% of Apple’s revenues, down from a peak of 29% in early 2015. It was the sixth straight quarter of ebbing sales. Apple is hoping that the rollout of its new iPhone 8 and X models will reverse the decline.

Apple in China

It’s up to Mahe, a fluent Mandarin speaker, to deliver that turnaround. But if the professional stakes are high, the new job carries personal significance too. For Mahe, the move is a homecoming.

Mahe is No. 12 on our Most Powerful Women International Edition list. See the full list here.


Her father always intended for her to go back. It was his idea to emigrate from Shenyang, China, to Canada when Mahe was 16. “He felt that having a Western college education was something that could help me in my career later on,” she says. They stuck it out even after he lost his job as a mining consultant. The man who’d been a college professor in China picked up odd gigs—pizza delivery, janitorial work—to put Mahe through school. After earning degrees in electrical engineering from Simon Fraser University, near Vancouver, she went on to jobs at Philips Semiconductors and Palm, among other stops.

When Mahe arrived at Apple in 2008, the wireless team numbered 25 people; recently it had 1,200. In addition to building her group, Mahe has contributed over the years to signature products such as the iPad, Mac, and Apple Watch, and helped develop services like Apple Pay. She’ll need to draw on all of that experience in her new role.

Recent versions of the iPhone haven’t impressed Chinese consumers, says Mo Jia, a Shanghai-based analyst for tech research firm Canalys. At the same time the technology available on locally made smartphones is advancing. Players like Huawei, Oppo, Vivo, and Xiaomi have produced “competitive products at lower prices, and to some degree [have] lured consumers away from Apple,” says Jia. In the second quarter, Apple ranked fifth in smartphone market share in China, measured by units shipped, behind those four rivals.

The entrance to an Apple store in Shanghai.
Jackson Lowen—The New York Times/Redux

Jia says the top-of-the-line iPhone X will deliver to Chinese consumers “the best experience on the current smartphone market,” but, in his estimation, its high price will stop the mass public from buying it. The iPhone 8 and 8 Plus, meanwhile, are more aimed at mainstream users, but they’ll face challenges from new handsets from Huawei and Xiaomi.

Mahe is confident the iPhones—loaded with new features, which she helped develop in her previous role, that cater to Chinese customers—will go over well. The new iOS 11 software, for instance, will let customers in China use their phone number as their Apple ID instead of an email address since some Chinese consumers don’t use email regularly. (Technology in China, to some extent, leapfrogged the PC and email era, and went straight to smartphones.) The new OS also enables iPhones to automatically recognize QR codes, despite their limited use in markets like the U.S. In China, “people use QR code for everything,” Mahe says.


Apple is determined to win in China. The company’s promise to open a Chinese data center (as required by a new cybersecurity law), its plans for four new Chinese R&D centers, and its $1 billion investment in Chinese ride-sharing service Didi Chuxing all underscore the importance Apple places on the market—not to mention its 12,000 employees there.

Mahe knows that a big part of her new job is to deepen the relationship “with our business partners and also with the government.” As well, she’ll have to reckon with the heavy regulatory hand of Beijing, which has tightened its grip. In late July, Apple removed several VPN (“virtual private network”) apps from its App Store in China to comply with the government’s crackdown on tools that circumvent the nation’s “Great Firewall.” Likewise, Apple deleted the New York Times app last December after a request from authorities. The moves raised eyebrows given the privacy stands Apple has taken in the U.S. Mahe says that to do business in China, it must obey Chinese laws. But she sees Apple’s values as a positive influence.

Perhaps that’s why Mahe says she sees her new role not just as a job but as “a calling.” In keeping with her late father’s wishes, she’d always planned to move back to China when she retired. “I thought that’s when I could return and contribute,” she says. Now she’s back ahead of schedule, after moving to Shanghai with her husband and four kids. Good thing that Steve Jobs convinced her to take the Ferrari.

A version of this article appears in the Oct. 1, 2017 issue of Fortune with the headline “Apple Reboots in China.”  

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