China ‘the most competitive market in the world’ for the iPhone says Tim Cook • The Register

Apple CEO Tim Cook called China “the most competitive market in the world” on the back of a somewhat poor quarter for the iPhone.

The CEO of the iPhone maker discussed the challenges his company was facing in the Greater China region – that’s mainland China plus Taiwan – during Apple’s Q2 earnings call. The iPhone business’ 10 percent decline in revenue compared to last year was significantly impacted by the eight percent year-over-year decline in Greater China, which is a crucial market for the Cupertino-based tech firm.

Cook, however, argued that iPhone revenue should be considered flat. “In the March quarter a year ago, we were able to replenish iPhone channel inventory and fulfill significant pent-up demand from the December quarter COVID-related supply disruptions on the iPhone 14 Pro and 14 Pro Max,” he said.

“We estimate this one-time impact added close to $5 billion to the March quarter revenue last year. If we remove this from last year’s results, our March quarter total company revenue this year would have grown,” Cook said. “Adjusting for this one-time impact, iPhone revenue would be roughly flat to last year.”

Still, even without counting that $5 billion influx from last year, the Apple CEO says sales would have been flat, an indication that domestic brands are putting up tough resistance. While iPhone revenue might be the same or only down eight percent compared to last year, one study says iPhone market share plummeted 19.1 percent, while Huawei, Xiaomi, and Honor saw substantial gains.

It wasn’t completely bad news for Apple apparently, as Cook claims the iPhone 15 and 15 Pro Max were the two best selling smartphones in urban China, which represents roughly two-thirds of the whole region.

“I maintain a great view of China in the long term,” Cook said in response to a question about his confidence in Apple’s performance in China. “I don’t know how each and every quarter goes and each and every week. But over the long haul, I have a very positive viewpoint.”

While Apple still sees China as an important market it needs to address, the tech corp is seeing promise in other developing countries too. “Obviously, China is by far the largest emerging market that we have,” Apple CFO Luca Maestri said. “But when we started looking at places like India, like Saudi, like Mexico, Turkey, of course, Brazil and Mexico and Indonesia, the numbers are getting large, and we’re very happy because these are markets where our market share is low, the populations are large and growing.”

The iPhone has seen ups and downs in China, such as in 2018 when iPhone sales fell well short of expectations that Tim Cook himself set. Apple was actually sued by shareholders over Cook’s over-optimistic outlook and the suit was only settled in March for nearly half a billion dollars. ®