Tim Cook, Apple Inc’s (NASDAQ: AAPL) long-time CEO has often said China sales will be a major key, if not the key to the company’s success. Reasonably to support his statement, China is the world’s largest wireless market. Estimates are that 900 million people there have wireless service, about three times the number in America. Two recent trends show Apple has made extraordinary progress in the world’s most populous nation.
Apple’s recent earnings showed a sharp jump in what the company calls Greater China. Global revenue reached $111 billion up from $92 billion in the year-ago period. That is an increase of 20%. Greater China sales reached $21 billion, up from $14 billion, a rise of 50%. China has reached 19% of Apple’s global revenue. That puts it close to all of Europe, ahead of Japan, and also ahead of the balance of Asia.
New data from the market research firm showed that Apple’s smartphone shipments were higher than any other manufacturer when measured by figures in the fourth quarter of last year. This means it not only topped rival Samsung. It also bested the three huge Chinese manufacturers that have grown rapidly over the last half-decade.
Apple shipped 90 million smartphones in the fourth quarter. Samsung shipped 79 million. China leader Xiaomi shipped 43 million, less than half the Apple number. China’s OPPO shipped 34 million. Former China market leader Huawei shipped only 32 million. Its sales were hurt by U.S. sanctions on many consumer electronics made in China.
As the Chinese manufacturers emerged, there was concern that their strongest sales would move beyond China’s borders, and would rise particularly in Apple’s home market. A look at the smartphones that make up most of the sales of AT&T, Verizon, and T-Mobile shows that is not true. Although it is not entirely clear why Apple has moved not only into first place in global shipments but that the gulf between it and rivals has grown.
Apple’s China sales are growing fast enough that they may pass Europe revenue in the next year. Cook’s belief about China’s importance will be more than a forecast.
Apple’s 100 million shares sold short
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