Apple Inc. (NASDAQ:AAPL) CEO Tim Cook shows the world once again that he was not bluffing when he said Apple would bounce back and take charge of the Chinese market.
The company’s reported earnings last Thursday shows revenue in China up to $9.8 billion during the fourth fiscal quarter showing a 12 percent year-over-year and a 22 percent sequential increase. The Q4 earnings contrasts sharply to the last quarter that saw sales in China went down by 10 percent year over year and 25 percent sequentially.
It feels good to have this kind of result about Apple in China
Cook who was delighted about the progress in Chinese sales said during a conference call that, “We increased market share for iPhone, Mac and iPad during the quarter. We hit all-time revenue records for services for the PRC during the quarter, we had very strong iPad revenue growth, we had double-digit unit growth in iPhone, and both the upgraders and Android switchers were up on a year-over-year basis during the quarter. So the results were broad-based — they were pretty much across the board,”
It would be recalled that last year, Cook said that China would be a major key to Apple’s growth going forward. In addition, this year, Apple promoted Isabel Ge Mahe, who had led Apple’s wireless technologies software engineering teams for nine years to a new position as Apple’s vice president and managing director of greater China reporting to Cook and COO Jeff Williams. Her job is to provide leadership and coordination across Apple’s China-based team.
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Apple’s growth in greater China comes from strong iPhone, Mac and iPad unit and market share gains. In terms on units sold in China, home brands like Huawei, Oppo, Vivo and Xiaomi outperformed Apple even though they still struggle to gain attraction in the U.S. According to Canalys estimates, majority of Chinese consumers use apps like WeChat to perform same functions of Apple’s iOS. More so, Chinese regulators are still quite skeptical of most American technology companies.
India and other emerging markets
Cook is also hoping that Apple moves onto the next huge market, India, where Apple is currently manufacturing many iPhone SE models. Cook admitted that the cell service in India is “materially better” than last year.
“It’s building stores, it’s building channels, it’s building markets, it’s building the developer ecosystem, it’s having the right product line up for the market,” Cook said. “I feel like we’re making good progress there and are gaining understanding of the market, but we still have a long way to go, which I sort of see as an opportunity instead of a problem.”
Apple’s iPad growth is due to the emerging markets says chief financial officer with iPad unit sales were up to 25 percent year-over year and India.
“Our emerging market performance during the quarter was very strong” added Cook. Even if you take China out of the equation, it is very strong, but you see what we pulled in China, making it a phenomenal quarter for us, he concluded.
Apple’s quarterly earnings came in at $268.9 billion, and on Thursday, the company’s board declared a cash dividend of 63 cents per share.