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China sees “amazing” growth, becomes second largest Apple market

During Apple's quarterly earnings call on Tuesday, the company detailed record sales of $4.5 billion in China for the September quarter, highlighting "amazing" progress in the region and continued opportunities among its burgeoning middle class.

Apple CEO Tim Cook said that China has become Apple’s second largest country in terms of revenue. “The China progress has been amazing,” he said, concluding that the area shows “enormous opportunity for the company.”

He added that the Cupertino, Calif., company will do everything it’s doing in the United States to sustain growth in the region, with strategies such as retail stores, online, APR channel, 3rd party channel and advertising. Cook further acknowledged that he has never seen a country with so many people moving into the middle class interested in buying Apple products.

Revenue in the Asia Pacific region grew by 139 percent year over year, or $6.53 billion. By comparison, the Americas and Europe generated $9.64 billion and $7.39 billion, respectively.

In China, revenue rose from 2 percent in 2009 to 12 percent this year and 16 percent this quarter, thus making China “the fastest growing region by far.” Total revenue for China amounted to $15 billion for fiscal year 2011 compared to $3 billion in the previous year. Apple last quarter reported $3.8 billion in revenue in the region.


Line waiting to enter IFC Mall Apple Store in Hong Kong. Credit: Gary Allen/ifoAppleStore via Flickr.

The company recently opened its sixth store in the Greater China region, an impressive ">flagship location situated in Hong Kong. Combined, the existing five retail stores in mainland China accounted for the most store traffic during the fourth quarter. Apple reported a record of 77.5 million visitors for its 357 stores in the September quarter with revenues averaging at $10.7 million per store.

On top of the company's official retail stores, there are 7,000 points of sale in Greater China for the iPhone.

Apple is looking to further consolidate its position in China by investing in more stores and other unspecified projects. The company reportedly said last year that it plans to open 25 retail stores in the region within the next few years. Apple is set to open 40 new retail stores globally in the first quarter of fiscal year 2012, with 75 percent of them planned for countries outside the U.S.

Earlier this year, the iPhone maker indicated plans to learn from its successes in China as it turns its attention to other emerging markets. As such, the company has said it will also focus on other regions in the following quarters including Brazil, Russia and the Middle East.

Revenue in Brazil topped $900 million last quarter, up 118 percent year over year. According to Cook, Russia is looking "more promising," while the Middle East poses "significant opportunities" for Apple.



45 Comments

SpamSandwich 20 Years · 32917 comments

Nice to see Apple's China strategy paying off handsomely.

jragosta 18 Years · 10472 comments

Just for reference - this explains why Apple's overseas cash is growing so quickly. There's no way for them to easily bring that cash into the U.S. without paying taxes.

SpamSandwich 20 Years · 32917 comments

Quote:
Originally Posted by jragosta

Just for reference - this explains why Apple's overseas cash is growing so quickly. There's no way for them to easily bring that cash into the U.S. without paying taxes.

Are you suggesting this is good or bad... or just noting a fact?

MacPro 19 Years · 19854 comments

Great to hear. So many people here a while back were stating 'for a fact' that hardly anyone in China could afford anything Apple made.

tundraboy 19 Years · 1919 comments

I don't think people realize how big of a monster the China market is going to be for Apple. The Chinese are probably the most brand-conscious consumers in the world and Apple is the most accessible of the top-line aspirational brands. Not that many people can afford a Mercedes Benz or a BMW, but a Mac, iPad or iPhone? Hell, yeah!

Somebody crunch the numbers and tell us what a whole generation of Chinese with rapidly rising incomes means for Apple's revenues and profits.