Kevin Bostic
Apple just had its "best quarter ever" in the increasingly important Chinese market, according to CEO Tim Cook, who says the iPhone maker is well positioned to address China going forward.
Speaking in the conference call for the company's quarterly financial results, Cook pushed back against the notion that Apple might have hit a wall in the Chinese market, which has a lower average income and downloads fewer apps than developed countries.
"We just had our best quarter ever in Greater China," Cook said. "Revenue came in at $8.8 billion. That's up 11 percent year-on-year. It's the same as Apple's growth."
Cook went on to tout Apple's growing number of Chinese points of sale for its iPhone, which now totals roughly 8,000. The company plans to double that number over the next two years.
Apple is also moving to add features to its online store in order to increase the opportunities for Chinese consumers to buy its products. Apple has been trying out new payment schemes in China and other developing markets to make its products more affordable to consumers in those markets.
Cook appeared to nod to this, noting the popularity of Apple's lowest-cost iPhone in the Chinese market.
"We've seen significant interest in iPhone 4 there, and we recently made it even more affordable to make it even more attractive to first-time buyers."
Apple's products have debuted to strong demand in China, but the company does not have a presence on the country's largest carrier, China Mobile. Cook and Apple's executives, though, are said to be working on that.
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11 Comments
just goes to show that Wall Street is wrong about Apple. Yes Apple's revenue has slowed (11% growth isn't what it used to be). However, what's the justification for pricing the stock the same as Dell, which has had two quarters of negative growth, primarily caused by the growing demand for iPad. It makes no sense to me.....
... the company does not have a presence on the country's largest carrier, China Mobile. Cook and Apple's executives, though, are said to be working on that.
Apple could, in theory anyway, solve two issues at once: the low-cost iPhone issue and the China Mobile issue. The low-cost phone could be made to run only on China Mobile's network.
China Mobile's network uses TD-SCDMA, a proprietary variant of CDMA. And they're developing TD-LTE, a proprietary variant of 3GPP LTE. If Apple builds a low-cost iPhone specifically for China Mobile's proprietary technologies, then there will be zero gray market exports. Two birds with one stone. Cheap iPhone for China that won't cannibalize sales in any other country.
On the other hand, Apple may not want to built yet another iPhone model just for China Mobile's oddball network technology. I'd think that Apple would want to ship a low-cost iPhone worldwide if possible. And it's possible that Apple and China Mobile will wait until "real 4G" is rolled out worldwide. China Mobile may eventually replace their proprietary technology with a world standard (but don't hold your breath.)
Of course, that would take years. LTE (the last gasp of 3G) will need to work its way through the world's systems first.
They have been talking about presence in China Mobile for a few years already. What is taking so long? I think it will not happen.
This is what I don't get: WS analysts want a low cost iPhone but that will further drive down the profit and margins and yet those analysts are screaming bloody murder that revenue and margins are falling.
[quote name="jungmark" url="/t/157147/cook-on-apples-chinese-q2-our-best-china-quarter-ever#post_2315837"]This is what I don't get: WS analysts want a low cost iPhone but that will further drive down the profit and margins and yet those analysts are screaming bloody murder that revenue and margins are falling.[/quote] It's because different "analysts" are screaming different things at the same time. None of them has a clue but that's not important. Screaming louder is.