Apple sees light at end of tunnel in China as revenues stabilize on constant currency basi...

Posted:
in General Discussion edited January 2017
Though Apple posted record-setting highs for the first quarter of 2016, revenues are still facing headwinds in China due to a weak yuan and continuing difficulties wth the Hong Kong market.




For the first fiscal quarter of 2017, Apple pulled in $16.2 billion in revenues from Greater China, down 12 percent from the same time last year. The operating segment, which includes Taiwan, Hong Kong and mainland China, was the only region to experience negative growth for the quarter.

In a call with investors on Tuesday, Apple CEO Tim Cook noted China's weak currency accounts for at least four points of Apple's quarterly revenue decline. Calculating on a "constant currency" basis, sales in mainland China were actually up six points year over year, he said. Further, the recent results are compared against Greater China's all-time quarterly record of $18.4 billion set in the first fiscal quarter of 2016.

Looking at individual products, half of all iPhone sales in the region went to switchers and first time buyers, and Cook said the company's smartphone install base continues to grow in "strong double digits." Upgraders are another story, one that was not mentioned during today's call. Beyond the bread-and-butter iPhone, both iPad and Mac saw double-digit growth over the past quarter.

Despite what Apple considers a "significantly better performance" in mainland China, at least compared to the trailing three quarters, Hong Kong continues to be a tough nut to crack, Cook said. The lucrative market has always been a difficulty for Apple, especially in terms of iPhone adoption.

Commenting on the Chinese situation, Cook said, "One, the currency has devalued 6 percent year over year, and two, Hong Kong remains a very very difficult market. And so I look at it and I'm encouraged with the significant improvement, but we're not without challenges there."

Comments

  • Reply 1 of 7
    The nice thing with bad news with a company like Apple is, if you have (1) faith and (2) patience, it always works out nicely when the good news (inevitably) comes around.

    Even more so when you buy on said bad news.
    watto_cobraSpamSandwichcali
  • Reply 2 of 7
    The comments about HongKong market shows how little Apple knows about Chinese market. HongKong has only 7 million people, the majority of HongKong iPhone sales actually goes to mainland people that travels to HongKong to buy things from luxury bags to iPhones. There is not a really separate HongKong market. When is the last time that Apple participate in anything meaningful in China besides sales? Did they make any donation to Chinese education cause? How about sponsoring some music festivals? Why didn't the analysts ask these kind of questions?
    SpamSandwich
  • Reply 3 of 7
    lukeilukei Posts: 330member
    mubaili said:
    The comments about HongKong market shows how little Apple knows about Chinese market. HongKong has only 7 million people, the majority of HongKong iPhone sales actually goes to mainland people that travels to HongKong to buy things from luxury bags to iPhones. There is not a really separate HongKong market. When is the last time that Apple participate in anything meaningful in China besides sales? Did they make any donation to Chinese education cause? How about sponsoring some music festivals? Why didn't the analysts ask these kind of questions?
    Was about to post exactly the same thing. Apple is appears are clueless on this matter.
    SpamSandwich
  • Reply 4 of 7
    The nice thing with bad news with a company like Apple is, if you have (1) faith and (2) patience, it always works out nicely when the good news (inevitably) comes around.

    Even more so when you buy on said bad news.
    Incidentally, look for a massive pop in the stock today, the day after this latest quarter's announcement. Looks to hit $127-128 or so.
    edited February 2017
  • Reply 5 of 7
    mubaili said:
    The comments about HongKong market shows how little Apple knows about Chinese market. HongKong has only 7 million people, the majority of HongKong iPhone sales actually goes to mainland people that travels to HongKong to buy things from luxury bags to iPhones. There is not a really separate HongKong market. When is the last time that Apple participate in anything meaningful in China besides sales? Did they make any donation to Chinese education cause? How about sponsoring some music festivals? Why didn't the analysts ask these kind of questions?
    I've been to Hong Kong only once and even I knew this.
  • Reply 6 of 7
    calicali Posts: 3,495member
    mubaili said:
    The comments about HongKong market shows how little Apple knows about Chinese market. HongKong has only 7 million people, the majority of HongKong iPhone sales actually goes to mainland people that travels to HongKong to buy things from luxury bags to iPhones. There is not a really separate HongKong market. When is the last time that Apple participate in anything meaningful in China besides sales? Did they make any donation to Chinese education cause? How about sponsoring some music festivals? Why didn't the analysts ask these kind of questions?
    Didn't Apple preserve a huge forrest in China?
  • Reply 7 of 7
    gatorguygatorguy Posts: 20,282member
    cali said:
    mubaili said:
    The comments about HongKong market shows how little Apple knows about Chinese market. HongKong has only 7 million people, the majority of HongKong iPhone sales actually goes to mainland people that travels to HongKong to buy things from luxury bags to iPhones. There is not a really separate HongKong market. When is the last time that Apple participate in anything meaningful in China besides sales? Did they make any donation to Chinese education cause? How about sponsoring some music festivals? Why didn't the analysts ask these kind of questions?
    Didn't Apple preserve a huge forrest in China?
    Yes, but more of a forest "farm". It's used for paper and wood products, but sustainability was lacking. 
    https://www.benzinga.com/news/15/05/5498045/apple-to-help-preserve-china-forest-acres
Sign In or Register to comment.