Home Technology Apple Milestones In China: From July 2008 To December 2012

Apple Milestones In China: From July 2008 To December 2012

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Apple Inc. (NASDAQ:AAPL) generated $23.8 billion of revenues in China during Financial year 2012, amounting to 15% of overall revenues. Sales into the country have growth dramatically since FY2009, when they were under $1.0 billion for the year. Apple has said that its rapid growth in China is the result of years of planning and the “enormous energy” put into it. To grow sales in China, Apple overcame legal and regulatory hurdles, added numerous points of distribution including several of its own retail stores, and adapted its software and user interface to the usage patterns of the local customer base.

Even with Apple’s enormous success so far in China, its penetration rate there is still low compared to developed regions, and according to Goldman Sachs’ recent report there is much remaining headroom for further expansion.

Apple Milestones In China: From July 2008 To December 2012

“China is currently our second largest market. I believe it will become our first. I believe strongly that it will,” Tim Cook said in a recent interview with China.org.

There is no doubt that China is the apple of Tim Cook’s eye.

To see what Apple Inc. (NASDAQ:AAPL) has done so far in China, we present you the Milestones of Apple’s development in China (via Goldman Sachs’ research report):

July 2008: First Apple Store in China unveiled (Beijing).

August 2009: China Unicom (Hong Kong) Limited (NYSE:CHU) and Apple Inc. (NASDAQ:AAPL) reach 3-yr non-exclusive deal to sell the iPhone. 1.5 million “underground” iPhones already in use in the country.

October 2009: China Unicom (Hong Kong) Limited (NYSE:CHU) becomes first carrier in China to offer the iPhone (3G and 3GS). The phones are not Wi-Fi enabled as regulatory approval has not been obtained.

Late 2009: China Unicom (Hong Kong) Limited (NYSE:CHU) sells just 100K iPhones in the six weeks following the launch. The slow start is blamed on the high list prices, as gray market prices are said to be substantially lower. In FY2009, China was just 2% of Apple’s revenue.

January 2010: Apple reports that by late January, it had seen activations for 200,000 cumulative iPhones in China, and ramped the point of sales to 1,500.

April 2010: China’s State Radio Monitoring Center approves Wi-Fi enabled iPhones. Apple reports that during the March quarter, iPhone units were up 9X yoy. Adds 800 more points of distribution in China. Apple reveals company revenue exposure to China for the first time, announcing it generated almost $1.3 billion in 1HFY10, which was up more than 2X yoy. Plans to open two stores in Shanghai over the summer, and 25 stores in China overall by the end of calendar 2011.

June 2010: Apple Inc. (NASDAQ:AAPL) reports that second quarter iPhone units were up 9X yoy in greater China.

July 2010: Second Apple Store in China opens (Shanghai).

September 2010: Begins shipping iPhone 4 in China as of the last day of the September quarter. China Unicom remains its only wireless carrier partner in China.

October 2010: Apple launches online store in China.

July 2011: China Mobile discloses that it had 5.6 million iPhones on its network as of the end of May, and that it was adding them at an incredible rate.

September 2011: First Apple Store in Hong Kong opens, generating the highest opening day for Mac sales ever. At quarter end, Apple highlights that Hong Kong and five other China stores are among its highest traffic and highest revenue stores in the world.

October 2011: Notes on the earnings call that 1) six retail stores are in operation in Greater China. China has become #2 on its list of top revenue countries “very, very quickly”. In FY2011, China was 12% of Apple’s revenue.

January 2012: Begins selling iPhone 4S in China. At first, China Unicom remains its only wireless carrier partner. After the iPhone receives approval to run on China Telecom’s network, the carrier confirms that it is preparing for its launch of the iPhone 4S.

March 2012: China Telecom Corporation Limited (NYSE:CHA) begins selling the iPhone 4S, becoming the second wireless carrier to sell the iPhone in China. The phone goes on sale at 2,800 CT retail stores and 3rd party retailers. CT processes 200K pre-orders in the week leading up to the launch.

April 2012: Reports 2QFY revenues in China of $7.9 billion. Notes iPhone sales up 5X yoy. Describes point of sales for its devices across China: 1,800 POS for Macs, 11,000 for iPhone, and 2,500 for iPad. Notes still small distribution footprint relative to what they have in the US.

July 2012: Reports that iPhone grew 66% in Greater China and 100% in mainland China during the June quarter. Begins shipping the new iPad into China, after obtaining routine regulatory approvals and resolving the iPad trademark issue.

October 2012: Reports quarterly China revenues of $5.7 billion, and full fiscal year revenues $23.8 billion. Notes China now represents 15% of Apple Inc. (NASDAQ:AAPL) revenues. iPhone was up 38% and iPad was up 45%.

December 2012: Apple rolls out the new iPhone 5 to 100 countries during the December quarter, including China. The fourth-generation iPad and the iPad mini also arrive in China in early December.

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