Apple Aims to Improve Troubled China Business

By Douglas A. McIntyre Published Dec 19, 8:15AM EST

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Apple Inc. (NASDAQ: AAPL) reportedly may turn to local companies to jumpstart sales of the new iPhone 16 in China.
Investors will be watching the numbers from the world’s largest smartphone market.

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Apple Aims to Improve Troubled China Business — © Spondylolithesis / iStock Unreleased via Getty Images

The Apple Inc. (NASDAQ: AAPL | AAPL Price Prediction) iPhone has done well in China for years. However, a recent research report shows that it has fallen behind local companies such as Vivo, Oppo, Honor, and Huawei. China is the largest smartphone market in the world, with over 900 million users. The U.S. number is barely a third of that.

Apple may turn to local companies to jumpstart sales of the new iPhone 16. According to Reuters, “Apple is in talks with Tencent and TikTok owner ByteDance about integrating their artificial intelligence models into iPhones sold in China.” Competition for AI-driven products in China is already fierce. This means that Apple would come to the market fairly late. iPhones sold in China do not include the AI features of iPhones sold in the United States, which is a substantial weakness.

A review of Apple’s latest earnings shows how critical China’s slowing revenue growth has become. Greater China revenue was 15% of the company’s $94.9 billion total in the most recent quarter. Its total revenue rose 6%. Greater China revenue fell by a small fraction to $15.3 billion.

Apple’s shares have posted a mediocre performance this year, up 28%. That compares to the S&P 500’s gain of 24%.

Apple’s next quarterly revenue release will contain the company’s holiday results and will be the first full quarter during which the iPhone 16 was available. While those figures may be critical for investors, the numbers from China will be carefully watched.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.