Apple’s CEO Cook sees China as a bright spot after record iPhone sales in the country, despite overall revenue drop
- Apple’s iPhone sales reached a record in September quarter, including China, despite overall revenue drop for US tech giant
- CEO Cook expressed optimism about China despite tough competition, geopolitical uncertainties and regulatory challenges
Apple CEO Tim Cook has expressed optimism about China despite slowing overall revenue, stating that demand for its iconic iPhone remains strong in the country following record smartphone revenue for the September quarter, as the US tech giant faces increased competition from local brands such as Huawei Technologies and Xiaomi.
Cupertino, California-based Apple released its quarterly earnings report on Thursday, which showed a fourth consecutive quarterly revenue decline between July and September but also record services revenue and third-quarter iPhone sales.
Amid rising geopolitical tensions and reports that sales of Apple’s new iPhone 15 have been slightly behind sales of previous versions of the handset in China, Wall Street analysts zeroed in on Apple’s business in the country in Cook’s earnings call.
“In the September quarter, we set an iPhone revenue record in China, and we’re very proud of that,” Cook said. “Over the long term, I view China as an incredibly important market, and I’m very optimistic about it,” he added.
The record iPhone revenue came despite Apple’s latest iPhone 15 series being available for one week less in the third quarter compared with its predecessor in the same period last year.
Apple’s iPhone 15 sees discounts on Chinese e-commerce sites ahead of Double 11
While Apple’s quarterly earnings report for July to September showed that its revenue from the Chinese market saw a slight year-on-year drop, Cook said past Mac computer and iPad supply disruptions and current foreign exchange rates were the main contributing factors.
Overall smartphone sales in China contracted in the third quarter by 3 per cent, but this narrowed the year-on-year decline sequentially, signalling the market could be close to bottoming out, according to a report from Counterpoint Research late last month.
Amid the surprise release of Huawei’s 5G Mate 60 Pro in late August, Apple’s resilient revenue numbers are “a good signal” for the company and the iPhone 15 series, said Counterpoint research director Jeff Fieldhack in a report on Friday. It is also promising given that the iPhone Pro Max and Pro were hit with initial supply constraints, he added.
The report noted that the iPhone 15 had also experienced a shorter pre-holiday shopping period and could see improvement in the year-ending quarter. Cook also said he expects to sell more iPhones in the holiday quarter this year, despite Apple’s upcoming quarter being one week shorter than normal.
iPhone sales in China have been closely monitored following a partial ban on the smartphone’s use by government workers and the release of Huawei’s Mate 60 Pro, which is powered by an advanced home-grown 5G chip despite tough US sanctions.
In a note e-mailed to the South China Morning Post on Friday, Canalys said that shipments of Huawei’s Mate 60 series in China were estimated to be above 2 million in the September quarter, while iPhone 15 series shipments were estimated at above 3 million.
Cook visited China last month and met with suppliers of Apple’s augmented reality device, the Vision Pro. He also met top-ranking officials who reportedly signalled China’s openness to the company. Cook said on Thursday that he had been excited by the interactions he had with local customers, employees and others.
The latest Counterpoint data shows that Apple is the number one smartphone brand in terms of revenue share globally - with a 26 percentage point lead over rival Samsung Electronics.
