Amidst global economic uncertainties, Apple CEO Tim Cook has expressed optimism about the company’s performance in China, a key market for the tech giant. During the recent fourth-quarter earnings call, Cook addressed concerns regarding Apple’s growth in various regions, particularly in China.
Cook highlighted that Apple’s performance in China has remained relatively stable year-over-year. He attributed this stability to a sequential improvement in foreign exchange rates and a record-high installed base of active Apple devices in the country. He further emphasized the positive signs observed in the Chinese market, mentioning that Apple’s latest smartphone models were the top two bestsellers in urban China, according to Kantar. Moreover, he reported that over 50% of new customers are purchasing Apple products like Macs and iPads.
However, when questioned about the potential impact of China’s economic stimulus package, Cook refrained from speculating, citing his lack of expertise in economic forecasting. The stimulus, announced in September, aims to address China’s ongoing economic challenges, including a slowdown driven by weak consumer demand and a struggling property market.
Apple’s financial performance for the fourth quarter reflected a slight beat in revenue, reaching $94.9 billion, exceeding analyst expectations of $94.56 billion. The company also reported adjusted earnings of $1.64 per share, exceeding the projected $1.60 per share. This marks the seventh consecutive quarter where Apple has outperformed analyst expectations on both revenue and earnings.
While Apple’s China business showed signs of stabilization, generating $15.03 billion in revenue compared to $15.08 billion in the previous year, it fell short of analyst projections for a 6.6% growth, which expected $16.08 billion. This follows four consecutive quarters of declining sales in China. Despite these recent trends, Apple’s latest smartphone model, the iPhone 16, experienced a notable 20% sales surge in China during its initial three weeks of release, even without featuring AI capabilities.
Apple’s optimistic outlook on the Chinese market, coupled with its recent financial performance, suggests that the company is navigating the economic challenges in China effectively. However, the potential impact of the economic stimulus package remains a key factor to watch, as it could significantly influence the future trajectory of Apple’s business in China.
