Tech Focus: Apple Inc (AAPL) Can Survive Without China
Apple Inc. (NASDAQ:AAPL) shares traded over 5 pct higher today after its earnings for the third quarter and revenue numbers beat initial projections. As traders followed this update, one of the top headliners in the market was Apple Inc’s most recent performance in China.
The tech giant disclosed that sales in the Greater China region hit just $8 billion during Q3, indicating a 10 pct drop from its year-ago quarter.
These figures also came in well below traders’ expectation of $9.37 billion, revenues that would have mirrored growth of almost 6 pct.
While this was not enough to hamper total global sales of iPhones, it does highlight the obstacles Apple Inc has run into in the past years.
Several years ago, China’s soaring middleclass was on the radar as the next crucial trade spot for consumer electronics. Top companies like Apple were able to take advantage of the opportunity quickly, and growth in the area was a big overall growth spark for the company.
But it wasn’t long for the Chinese market’s rivals to catch up. China smartphone manufacturers like Vivo and Oppo have been rising at an impressive pace, and they have taken market share by selling the same gadgets at much affordable rates.
For instance, Oppo hit a 122 pct growth in smartphone revenues in China along in 2016, doubling its share in the market to 17 pct. Apple’s market share in China fell to around 10 pct by end of the year.
Nevertheless, Apple just recorded strong top and bottom line figures and released guidance for Q4 that exceeded consensus projections. Why is this of any importance? Because it is proof that the tech titan can succeed without growth in China.
One of the techniques that Apple employs is by setting its sights on other upstart growth markets. As a matter of fact, it seems like the company’s focus has turned to the southwest—to the highly-advancing smartphone region in India.
In Tuesday’s investor media briefing, Apple chief executive officer Tim Cook underscored the firm’s investments in India, disclosing that Apple recently rolled out an app accelerator center and began production of the iPhone SE in India.
In terms of specific numbers, the company did not detail its sales in India, but revenues in the company’s Asia-Pacific region rallied around 16 pct year-over-year to $2.72 billion.