Apple's earnings in China drop nearly 30% in Q4

Apple has revealed it achieved $7.9 billion in sales in China, down considerably from last year's $11.1 billion. However, Tim Cook says that was better than Apple's expectation.

During its fourth quarter 2020 financial earnings call, Apple announced that its earnings in China were down $7.9 billion. That's a drop of 28.9% from this time last year when it earned $11.1 billion, and is also less than last quarter's $9.33 billion.

"Back in April, I said we were in the most challenging environment in which Apple, as a company has ever operated," said Tim Cook. "That atmosphere of uncertainty of resolve of making difficult calls with limited information has not only come to define Apple's year... it has been a chapter that none of is will forget."

"China is the region that was most heavily impacted by the absence of the new iPhones during the September quarter," he continued. "Still, we beat our internal expectations in the region, growing non-iPhone revenue strong double digits and iPhone customer demand grew through mid-September."

How Apple's quarterly revenue in Greater China has performed in recent years (Source: Malcolm Owen)

"Of course not shipping new iPhones for the last two weeks of September, makes that [China earnings] number in the aggregate a negative," Cook told analysts during the call. "But net [situation is that] the underlying business in China last quarter was very strong, and perhaps very different than you might think from just a quick look at the stated number, in terms of this quarter."

Cook said that looking at the earnings up to when Apple might ordinarily have launched new iPhones, China sales were "growing from a customer demand point of view."

"Although we don't [give a guide] to revenue," continued Cook, "I would tell you that we're confident we'll grow this [next] quarter in China. And so we're very bullish on what's going on."

Source: Malcolm Owen

"When you pull back the lens to the entire fiscal year, it's a testament to the team's work into the resilience of the business in the era of COVID-19," said Cook

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10 Comments

anantksundaram 20391 comments · 18 Years

About 4 years ago

Why should this come as remotely a surprise to the market (or anyone surprised)!?

After all a 5G phone is just around the corner, and China’s rapidly adopting the technology. It would be foolish to NOT future-proof an expensive smartphone purchase in 2020 when there’s a major shift in the offing, no?

elijahg 2842 comments · 18 Years

What is Cook on about? Does he know anything about Apple's history prior to him joining Apple, post-Compaq? Apple was most certainly in a more "challenging environment" then than they are now. No one was buying Macs, Apple was a few months from bankruptcy, Apple had a reputation for expensive buggy computers, Mac OS Copland was a dud and Microsoft was steaming ahead with Win95 and Win98. Only a few loyalists stayed on, and kept Apple afloat. Those days were most certainly a more "challenging environment", and was entirely Apple's doing. The challenging environment now is due to the virus, and no one is blaming Cook for that - indeed as he says, 'it's a testament to "the team's" work into the resilience of the business".

entropys 4316 comments · 13 Years

elijahg said:

What is Cook on about? Does he know anything about Apple's history prior to him joining Apple, post-Compaq? Apple was most certainly in a more "challenging environment" then than they are now. No one was buying Macs, Apple was a few months from bankruptcy, Apple had a reputation for expensive buggy computers, Mac OS Copland was a dud and Microsoft was steaming ahead with Win95 and Win98. Only a few loyalists stayed on, and kept Apple afloat. Those days were most certainly a more "challenging environment", and was entirely Apple's doing. The challenging environment now is due to the virus, and no one is blaming Cook for that - indeed as he says, 'it's a testament to "the team's" work into the resilience of the business".

Quite so. The “beleaguered” days.
That said, while the line up is definitely better than the last five years, the best iMac was the mid 2011, and the best laptops were 2013 designs, and the last decent Mac pro was 2012. It’s all lockdown since then, and that will continue.

maclander 6 comments · 6 Years

Thank Trump for that.

Hint: WeChat

EsquireCats 1268 comments · 8 Years

Chinese sales will always be big enough to bother, but never anything like Apple’s performance in fairer markets. The regular fluctuations are also symptomatic of that.

Any great success Apple achieves will be a trigger for the government to further restrict their operations.

It’s not a tactic that has a long term success rate - as Apple appear happy to diversify out of the country.