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Apple sees signs of recovery in China

04 MAY 2017

China was once again the weak spot for Apple, with revenue in greater China dropping 14 per cent to $10.8 billion in the company’s fiscal Q2 ending 31 March.

Apple doesn’t break down iPhone sales by region, but given its Mac and services divisions both had double-digit revenue growth during the March quarter, its smartphone sales in the region certainly took a hit last quarter.

Tim Cook, Apple’s CEO, talked up its “improving performance” in greater China – which includes the mainland, Taiwan and Hong Kong. Through the first two quarters of fiscal 2017, its year-over-year comparisons improved significantly over the last two quarters of fiscal 2016, he said.

First half revenue in greater China was down 13 per cent year-over-year, about a third of which was attributable to forex changes, compared with a 32 per cent revenue decline in the second half of last year.

“We’ll improve a bit more during this current quarter, not back to growth, but improve. We continue to believe that there’s an enormous opportunity there. And in the scheme of things, our business is pretty large there,” he said. “We continue to be very enthusiastic about our opportunity in China.”

Rising revenues
Cook said Apple had strong results from its retail stores in mainland China during its fiscal Q2, with total store revenue up 27 per cent year-on-year. He noted its performance continued to be weak in Hong Kong, which was hit as the tourism market continues to slump.

Revenue in Japan rose 5 per cent to $4.48 billion in is fiscal Q2, while sales for the rest of Asia increased 20 per cent to $3.79 billion.

Cook said Apple set a new March quarter record for India, where revenue grew by strong double digits. “We continue to strengthen our local presence across the entire ecosystem, and we’re very optimistic about our future in this remarkable country with its very large, young, and tech-savvy population, fast-growing economy, and improving 4G network infrastructure.”

The CEO said it doesn’t forecast iPhone sales by geographic region when asked about its target for India for the full fiscal year. “We have a ton of energy going into the country on a number of fronts. We believe that there is a huge opportunity for Apple there.”

Apple generated a net profit of $11 billion in its fiscal Q2, up from $10.5 billion in the same period of 2016, on revenue of $52.9 billion, some 5 per cent higher.

The greatest gains came from Asia Pacific (excluding China and Japan) and the US.

Author

Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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