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Apple's impressive revenue led by fourfold increase in China

post #1 of 18
Thread Starter 
Apple's increased focus on China is paying off, with revenue from the nation quadrupling last quarter, thanks largely to strong sales and quick adoption of the iPhone and iPad.

Apple executives detailed their company's great success in China during their quarterly conference call on Tuesday. The executive team noted the astounding fact that Apple earned just over $3 billion in China in all of fiscal 2010, but achieved $2.6 billion in the same country in the first quarter alone of fiscal 2011. Apple's performance was up four times year over year, riding high on the strength of iPhone and iPad sales.

"We, several years ago, identified China as our top priority," Apple Chief Operating Officer Tim Cook said of the so-called "BRIC" (Brazil, Russia, India and China) countries on Tuesday. "And we put enormous energy into China. And the results of that have been absolutely staggering."

Cook was later asked about the fact that the iPhone remains only available from carrier China Unicom in that country. Recent rumors have suggested that Apple's new CDMA iPhone 4 could make its way to other carriers around the world, particularly in China.

Of course Cook declined to reveal any information that might give away Apple's future plans, though he did reveal that his company is no longer in any contractual exclusive arrangements for the iPhone in any country. The last such deal, with AT&T, concluded earlier this month, with the announcement of the Verizon iPhone.

"I can guarantee you that we are always looking at opportunities to grow," Cook said. "Of course, in the very short-term, I would also remind you that we're constrained on iPhone 4, and we're working around the clock to get as many of these out to our existing partners as we can."
post #2 of 18
Imagine getting $2 from everyone in China...
post #3 of 18
This is why Apple needs to release the iPhone 4 CDMA on China Telecom with 80M subscribers (which is probably the iPhone3,3 in the latest iOS 4.3b1), and why they need an iPhone 4 GSM/TD-SCDMA for China Mobile’s ½ BILLION subscribers. Of course, they also need to increase production and component sourcing so they can sell enough, so who knows when China Mobile will be a viable option.
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post #4 of 18
Quote:
Originally Posted by solipsism View Post

This is why Apple needs to release the iPhone 4 CDMA on China Telecom with 80M subscribers (which is probably the iPhone3,3 in the latest iOS 4.3b1), and why they need an iPhone 4 GSM/TD-SCDMA for China Mobiles ½ BILLION subscribers. Of course, they also need to increase production and component sourcing so they can sell enough, so who knows when China Mobile will be a viable option.

After China, I'm waiting to see them place surgical focus on India as well. It will be easy trips to the bank when they come online!
post #5 of 18
Quote:
Originally Posted by studiomusic View Post

Imagine getting $2 from everyone in China...

I'd have almost as much money as Oprah.
post #6 of 18
Quote:
Originally Posted by AppleInsider View Post

.....The executive team noted the astounding fact that Apple earned just over $3 billion in China in all of fiscal 2010, but achieved $2.6 billion in the same country in the first quarter alone of fiscal 2011. ....

They had Net Income of $3B in China in 1Q11? Are you sure?

Or, AI, are you referring to $3B in Revenue?
post #7 of 18
...but, but, "Chinese people will never buy devices without a stylus, it's a deal breaker", remember that claim from a couple of years ago?
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post #8 of 18
Quote:
Originally Posted by anantksundaram View Post

They had Net Income of $3B in China in 1Q11? Are you sure?

Or, AI, are you referring to $3B in Revenue?

Apple's fiscal year starts in September and ends in August of the following year. The holiday season is the first quarter of Apple's new fiscal year. My take on it is that from September 2009 until August 2010 Apple did 3 billion in revenue in China. Then from September 2010 to December 2010, Apple did 2.6 billion in revenue.

In my opinion, this is the most important info from the CC call because this is where a lot of Apple's growth could be coming from in the coming years. Apple is concentrating on China it would seem with their plan to open 25 stores over a 2 year period. I would hope this would mean that Apple is also concentrating on the growing economies in the region, specifically India. I will bet we will hear about the plans after they have been implemented.

Neal
post #9 of 18
Quote:
Originally Posted by anantksundaram View Post

They had Net Income of $3B in China in 1Q11? Are you sure?

Or, AI, are you referring to $3B in Revenue?

in tim cook's july earning report, he mentioned that in the first half of fy10 china fetched $1.3 billion. now in the last quarter report, the revenue was $2.6b. so $4billion is about the right mark. i don't know what the operating cost for apple in china, but if opex is only about 1/3, then $3b for profit would be reasonable too, of course bom is not included.
post #10 of 18
Quote:
Originally Posted by sflocal View Post

After China, I'm waiting to see them place surgical focus on India as well. It will be easy trips to the bank when they come online!

india might be different. ppl in eastern asian countries, such as japan, korea, and china, tend to buy something so trendy that they might not use it into full. i have been puzzled by chinese friends' desires to get an iphone with knowing that s/he can not use it in china in 3G. it might be chinese consumers' irrational part.

but regardless, as long as apple can focus on building great products, indian or chinese would buy it. it can not be too long that the first apple store will appear in india.
post #11 of 18
Quote:
Originally Posted by nealg View Post

Apple's fiscal year starts in September and ends in August of the following year. The holiday season is the first quarter of Apple's new fiscal year. My take on it is that from September 2009 until August 2010 Apple did 3 billion in revenue in China. Then from September 2010 to December 2010, Apple did 2.6 billion in revenue.

Assuming what you saying is right, it's $2.6B in revenue, not earnings for that period. Apple didn't 'earn' $2.6B (which would imply, given the meaning of the term earnings, that Apple had a Net Income of $2.6B), but rather, that they had $2.6B worth of sales in China.

I am simply asking if, in its usage, AI is conflating the term 'revenue' with 'earnings,' that's all. The two mean very different things. AI has often done this in the past.
post #12 of 18
Quote:
Originally Posted by anakin1992 View Post

in tim cook's july earning report, he mentioned that in the first half of fy10 china fetched $1.3 billion. now in the last quarter report, the revenue was $2.6b. so $4billion is about the right mark. i don't know what the operating cost for apple in china, but if opex is only about 1/3, then $3b for profit would be reasonable too, of course bom is not included.

Your assumptions and explanations don't make sense, sorry!

(What is 'bom', btw?)
post #13 of 18
Quote:
Originally Posted by anantksundaram View Post

Assuming what you saying is right, it's $2.6B in revenue, not earnings for that period. Apple didn't 'earn' $2.6B (which would imply, given the meaning of the term earnings, that Apple had a Net Income of $2.6B), but rather, that they had $2.6B worth of sales in China.

I am simply asking if, in its usage, AI is conflating the term 'revenue' with 'earnings,' that's all. The two mean very different things. AI has often done this in the past.

I see now what you were asking. AI used the term earned when they should have used something related to revenue. You are correct on this.

And the Apple fiscal year does start with the holiday quarter. This is something that gets confused as well when writers don't specify if they are talking about calendar vs fiscal year. As a society, I don't think we write as well as we used to and we don't read as carefully as we used to. I think things will get worse with all the texting that is going on.
post #14 of 18
Quote:
Originally Posted by anantksundaram View Post

(What is 'bom', btw?)

Bill of materials - the component cost.
post #15 of 18
Quote:
Originally Posted by nealg View Post

IAs a society, I don't think we write as well as we used to and we don't read as carefully as we used to. I think things will get worse with all the texting that is going on.

I agree with that. A lot of it is innocuous (even if irritating).

The problem occurs when this actually changes meanings and interpretations significantly, such as, when a leading media outlet (which, AI is now) confuses the top line (revenue) with the bottom line (earnings).

Just a pet peeve of mine, that's all.....
post #16 of 18
Quote:
Originally Posted by anakin1992 View Post

india might be different. ppl in eastern asian countries, such as japan, korea, and china, tend to buy something so trendy that they might not use it into full. i have been puzzled by chinese friends' desires to get an iphone with knowing that s/he can not use it in china in 3G. it might be chinese consumers' irrational part.

Not true, the iPhone's 3G works just fine on China Unicom. That said, even those on other networks without 3G (China Mobile, China Telecom) should not be labelled as irrational for wanting to use an iPhone. 3G hasn't really caught on in China yet (though I can see this changing soon) as many folks cannot justify doubling, tripling, or quadrupling their current monthly cellular costs to get 3G access. Folks here are used to spending a lot of money for the phone (due to lack of phone subsidies), but they are not yet used to paying a lot for their service. That said, China Unicom is offering a nice deal on the iPhone 4 with service prepayment so this help drive the uptake of 3G. Unfortunately, the iPhone 4 is currently 6 months backordered here. That's thrrough official channels - grey market imports are currently selling for $900 US.

In any case, I'm on China Mobile myself and I get by just fine with wi-fi on my iPhone (and GPRS is available if I need "emergency" data access).

Quote:
Originally Posted by anakin1992 View Post

but regardless, as long as apple can focus on building great products, indian or chinese would buy it. it can not be too long that the first apple store will appear in india.

From speaking with friends I understand that the desire for Apple products is just as strong in India, where there is even less availability (grey market imports). That is why I feel that a lot of so-called "analysts" are still underestimating the growth potential of Apple.
post #17 of 18
Incredible growth in the great, uncrackable market where nobody can afford anything made by Apple, obviously... LOL.

My impression is that there is a huge amount of respect for Apple and especially Steve Jobs in China. They respect a very wealthy person who got that way by not compromising on quality and taste.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #18 of 18
[QUOTE=AIA;1790092]Not true, the iPhone's 3G works just fine on China Unicom. That said, even those on other networks without 3G (China Mobile, China Telecom) should not be labelled as irrational for wanting to use an iPhone. 3G hasn't really caught on in China yet (though I can see this changing soon) as many folks cannot justify doubling, tripling, or quadrupling their current monthly cellular costs to get 3G access. Folks here are used to spending a lot of money for the phone (due to lack of phone subsidies), but they are not yet used to paying a lot for their service. That said, China Unicom is offering a nice deal on the iPhone 4 with service prepayment so this help drive the uptake of 3G. Unfortunately, the iPhone 4 is currently 6 months backordered here. That's thrrough official channels - grey market imports are currently selling for $900 US.

In any case, I'm on China Mobile myself and I get by just fine with wi-fi on my iPhone (and GPRS is available if I need "emergency" data access).
i'm on china mobile too, i've seen many people buying through china unicom cos they can get 3G service... personally, i'm waiting for iphone to be launch on china mobile so that i can use 3G service.

my way or the highway...

Macbook Pro i7 13" with intel SSD 320 series and 8GB RAM, iPhone 5, iPad 3 (Retina)

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my way or the highway...

Macbook Pro i7 13" with intel SSD 320 series and 8GB RAM, iPhone 5, iPad 3 (Retina)

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