Data points to Apple growing again in China

Apple logoSeveral data points suggest sales trends are improving for Apple in the company’s most important international market.

Daniel Sparks for The Motley Fool:

New data from the China Academy of Information and Communications Technology on iPhone sales in China during December suggests that iPhone revenue could be picking back up in the important market during fiscal 2020. With iPhone being Apple’s biggest segment, this would bode well for the company’s overall performance in its Greater China market.

During Apple’s holiday quarter in 2018, iPhone sales took a significant hit. Total iPhone revenue fell 15% year over year during the October 2018-December 2018 time frame, which is the company’s first quarter of fiscal 2019.

While investors expected headwinds in iPhone during the period, this pullback in the smartphone segment’s revenue was worse than anticipated. One geographic segment, in particular, accounted for the unforeseen magnitude of declining iPhone revenue during the period: Greater China.

MacDailyNews Take: Q120 earnings are set up for a nice compare. With China rebounding on the strength of iPhone 11, iPhone 11 Pro, and iPhone 11 Pro Max, year-over-year growth, especially in China, will be good news for Apple. Here’s what CEO Tim Cook had to say about China during the company’s last conference call at the end of October:

Geographically, we set new Q4 revenue records in the Americas and Rest of Asia Pacific and saw further improvement in our revenue trends in Greater China… We also saw continuous improvement in Greater China where year-over-year revenue comparisons became more favorable each quarter of fiscal 2019 from a 27% decline in the first quarter to a 2% decline in the fourth quarter… it’s not all about iPhone in China, the services area grew double digit. We began to see more gaming approvals in the quarter, or I should say some key gaming approvals. It’s not all about quantity, but about which ones, we saw that. Also Wearables, Wearables are doing so great at a company level. They’re doing even better in China. And so lots of positives there. — Apple CEO Tim Cook, October 30, 2019

3 Comments

  1. The expert Apple naysayers must deal with reality… Great iPhone 11/Pro/Max sales despite “everyone is waiting for 5G” (not) AND better results from China despite “negative influence of 🇺🇸 vs. 🇨🇳 trade tensions” 😏

  2. I hope the data is correct. I think Apple would have been able to sell more iPhones in China by simply cutting prices a bit. This is just my opinion as I have no facts to back it up. It’s just that I think consumers will believe they’re getting a bargain and buy the product. I believe that’s just human nature. I’m not sure if it goes against Apple’s credo of charging what the product is actually worth but I think a small loss of profit is better than the consumer not buying the product. I would never expect Ferrari to cut prices on their cars just to increase sales, so maybe Apple shouldn’t either.

    I’m just on the outside looking in and Apple must be filled with smart people who know what it takes to move products. Apple simply can’t go around trying to undercut Chinese Android smartphone manufacturers in a price war as that would likely prove disastrous for Apple. Apple will just have to keep building superior iPhones but even so, if the smartphone market is saturated that won’t guarantee higher sales.

    I’m not sure what Apple can do in India with the iPhone. There is too big of a price gap for the average Indian consumer to afford iPhones when they’re currently buying $150 feature-phones.

    1. Apple has never cut margins just to gain market share. They have 19% of the market and 87% of the total profits for the sector. Huawei is killing it in the Chinese market as far as growth. The problem is they made $2 billion to Apple”s almost $12 billion in profit. Apple would have to do a major margin cut to try to compete with them.

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