Mikey Campbell
Apple CEO Tim Cook on Tuesday reiterated a positive outlook on Greater China despite suffering a year-over-year revenue contraction during the second quarter of 2016, saying the region is "a lot more stable" than some perceive.
Apple revenue from Greater China, defined by the company as Taiwan, Hong Kong and mainland China, dipped to about $12.5 billion in the three-month period ending in March, down 26 percent year-over-year. By comparison, Apple's total quarterly revenue for the second fiscal quarter of 2016 fell 13 percent to $50.6 billion.
China is viewed as Apple's most important growth market, and until this quarter did not disappoint as a massive revenue generator. Over the preceding months, Greater China posted double-digit gains while more established markets like the U.S. and Europe saw only moderate growth. As noted by Piper Jaffray analyst Gene Munster, the region grew 14 percent to reach $18.4 billion in the most recent December quarter, which means today's earnings report is a sequential drop of 32 percent.
Despite what some call a weakening market, Cook remains optimistic on mainland China. During today's conference call, Cook said revenues there were down 11 percent year-over-year, which translates to about 7 percent in constant currency terms. Compared to the same time last year, when mainland China revenue grew a whopping 81 percent, Apple's most recent figures are down only 5 percent. Apple CFO Luca Maestri presented the same numbers earlier in the call.
In any case, Apple is moving ahead with an aggressive push into China and today announced plans to build at least five more brick-and-mortar Apple Store locations in the region by the end of quarter three. The company is on pace to meet its goal of building 25 new stores in China by the end of 2016.
For the recently ended quarter, Apple reported its first quarterly revenue decline in 13 years, largely due to a first-ever deceleration in iPhone sales.
William Gallagher
Christine McKee
AppleInsider Staff
Chip Loder
Malcolm Owen
15 Comments
Can someone clarify this for me (I listened to the conference call and have all the numbers in front of me). The first paragraph of this article it says Greater China revenue was down 26% year-over-year (Q2 2016). Then later in the article says, Cook said revenues there were down 11% year-over-year. And goes on to say "most recent figures are down only 5%. My question is where is the 11% and 5% coming from if year over year decline is 26% for Q2 2016? I heard Cook mention this during the call, but was confused what he was talking about.
I think the 26% is for "Greater China" and the 11% is for mainland China. In constant currency that 11% becomes 7%. I don't know how they came up with the 5% figure.
IPhone 6 plus is a joke = shoddy Chinese crap as usual , and apple care will kindly take more of your money, decline means people waking up to their junk phones
This is a bit idiotic, the Iphone 6 was released in Q2 while the 6s was released Q1 in China, that alone makes a huge difference.
This basically explains a lot of the difference in revenues in Q2.
I think the real decline was Q1 if they had the same release schedule as last year and then Q2 would have been flat.
Last year Q2 and Q3 came in way way above expectations which kind of messes up this year's comparison.