Apple Inc. (NASDAQ:AAPL)’s overall sales growth in China wasn’t as stellar as the Cupertino tech giant initially hoped for. A regulatory delay may be the culprit.
Yesterday the company shared fiscal fourth quarter results. This quarter ran from July through September. The overall results show Apple sold 39.3 million iPhones. This is a number up from 16 percent last year. Revenues for that period also rose 12 percent year over year to $42.12 billion. This is a record for the fourth fiscal quarter.
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Apple iPhone 6: A decline in sales numbers
Although international sales accounted for 60 percent of revenues, China’s revenues have slipped from last year. During the quarter, Apple’s revenues from greater China were upped only from 1 percent last year. Revenues for that quarter also dipped from 3 percent to $5.78 billion.
Yuanta Investment analyst Jeff Pu elaborated, “The larger-screen new iPhones are expected to gain market share from Android phones in China as Apple remains one of the most desirable consumer brands in the country.”
iPhone 6: China’s infuence on smartphone market
China has been one of Apple’s key markets. Late last year, the company sold a record number of iPhone 5S devices. This year, about 16% of second quarter sales also came from China. The reason for the recent decline? Apple did not start offering the iPhone 6 until about a month after it was first unveiled. This was because of the country’s regulatory issues involving foreign products. China’s Ministry of Industry stalled the approval until latter September.
Last Monday Apple had a conference call with analysts and the tech giant’s CEO Tim Cook opened up about the China issue. He actually said in one respect iPhone sales rose in China’s market. Unlike last year’s bump in channel inventory, Apple scaled back this year.
Cook summed it up with, “And so you have a compounded effect of no launch and a huge change in channel inventory in a year-over-year basis. And to share with you what it was in greater China, iPhone unit sell-through despite no launch in Q4 was up 32 percent year over year. The market was projected by IDC to only grow 13 percent. So we feel incredibly great about that.”
Time will tell how this affects Apple’s next quarter.