News Column

China,United States : APPLE finds opportunities in CHINA

May 5, 2014

Apple established an all-time quarterly revenue record of $10 billion in China in Q2. The tech giant's strength in the region is a great sign for Apple investors who are trying to find ways the company can still grow its business.

In its 2Q earnings call, Apple CEO Tim Cook explained that when you zoom out to the first half of 2013, total Greater China year-over-year revenue growth of 21% makes it the company's fastest growing region.

The region accounts for a meaningful portion of Apple's total revenue. Including Greater China retail sales, the nearly $10 billion in revenue that comes from the region during the quarter made up of 21% of Apple's total top line.

Apple doesn't plan to let the opportunity go untapped.

One of the key contributing factors to the growth in China is to sell its iPhones through the world's largest wireless carrier, China Mobile. And this should carry over into future quarters; China Mobile's rollout of its 4G network.

The health of Apple's business goes beyond Apple's arrangement with China Mobile. Sales of both iPhones and iPads in China outpaced the overall growth for smartphones and tablets in the region during the quarter, based on data from IDC. Apple's iTunes software and services revenue in the region grew by triple digits.

Apple's lineup of iPhones are rumored to sport 4.7-inch and 5.5-inch displays, should also serve as a boon for the company's opportunity. Smartphones with larger displays are selling nicely in China. 4 out of every 10 smartphones sold in China had a screen size larger than 5 inches.

There will be many surprises among manufacturers fighting for market share in the world's largest smartphone market, there's little doubt Apple will be among the largest beneficiaries of the opportunity. When it comes to premium smartphones in China, Apple dominates.

27% of smartphones in China priced at $500 plus, 80% are iPhones.

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Source: TendersInfo (India)

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