‘Apple is only scratching the surface in China’ with 6X growth and $3.8B quarter?


Apple’s beautiful Bejing Retail Store

Apple felt incredibly bullish on China in today’s conference call, rattling off numbers that even Tim Cook admitted they wouldn’t have believed if they had been told a year ago.  How big is China for Apple?

In the year ago quarter, Apple counted $630 Million in revenues from China.  Today, Apple grew that by a factor of six to $3.8B of the total $28+B of their total revenues for the quarter.  That’s 13.3% of Apple’s total business by revenue which now comes from China.

To put that in perspective, $3.8B would have been over two-thirds of Apple’s 2007 (iPhone release) same quarter revenue and more than Apple’s whole global revenue for June ’05.

But ‘we’re only scratching the surface’.

Cook talked again about pre-paid phones (which are dominant in China) and a deal with the 600M-user China Mobile which is said to be in the wings.  Apple is also said to be exploring a cheaper iPhone offering which would appeal to a much broader swath of the Chinese market (Indian too).  This comes against a backdrop of Google Chairmen Eric Schmidt who is also bullish on Asia for Android.

Apple is also being aggressive in their China retail stores, choosing to open larger flagship stores which take more time to build.  CFO Peter Oppenheimer mentioned that the Hong Kong Flagship store at the IFC would be opening this quarter.  But Apple has an order of magnitude more stores opening up across China.  Apple now sells through four stores.  They have over 30 planned just for the next year.

If Apple’s growth in China stays on the current pace, which ‘scratching the surface’ seems to at least partially imply, China will account for over $20B in revenue at this time next year – which could start approach Apple’s US revenues even if Apple continues to grow globally as it has.

Below is an edited transcript of Cook’s remarks on China from Macworld: Read more

Oppenheimer: “future product transition will affect September quarter”, 220M iOS devices all time


mockup

On the earnings call Q&A just now, CFO Peter Oppenheimer said that a ‘September Quater  product transition’ would affect the revenues for the upcoming quarter.  Obviously, that screams iPhone, which is now Apple’s biggest product.

To be clear, the September Quarter spans three months so it doesn’t necessarily mean ‘September’…but that isn’t unreasonable either.

On that note, he also mentioned in the opening statement that 220 million iOS devices have been sold all time.  We’re not sure if that includes AppleTVs.

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