There have been signs and indications of China’s growing importance to Apple’s bottom line before. In the June quarter the company grew China revenues sixfold, to an astounding $3.8 billion, or nearly eight percent of its total revenue for the quarter. Just three months later, however, the business in China has ballooned to $4.52 billion, an impressive sixteen percent of Apple’s total $28.27 billion revenue for the September quarter. China contributed with twelve percent in the more than $108 billion of fiscal 2011 revenue, or about fifteen billion dollars. Last year revenue from China was just three billion dollars and in 2009 only two percent of Apple’s total revenue.
In other words, one in six dollars of Apple’s quarterly revenue came from China (almost one-in-eight looking at fiscal 2011). The 1.33 billion people country is now Apple’s second-best revenue market. Moreover, revenue for the entire Asia Pacific region grew by 139 percent year over year to $6.53 billion, with CPU units climbing by 61 percent (three percent revenue and eighteen percent CPU units sequential growth). Compared to a 34 percent annual revenue growth in the Americas ($9.64 billion) or a 36 percent growth in Europe ($7.39 billion).
It’s clear now that the Asia Pacific region is Apple’s fastest-growing market, outpacing Europe and the Americas by nearly four times. In fact, Asia Pacific raked in nearly two-thirds of the Americas’ revenue, Apple’s top revenue market. And at four times larger growth, the Asia Pacific region could become Apple’s #1 revenue generator by this time next year.
CEO Tim Cook said in a conference call with Wall Street analysts that “the China progress has been amazing”, calling it an “enormous opportunity” for Apple. It’s bound to grow even bigger as Apple builds more stores to increase its distribution footprint there. Apple operates five flagship retail stores in China which combined had the most traffic in the quarter. The company has managed to build an impressive thirty retail stores worldwide during the quarter, including massive outlets in Hong Kong and Shanghai, the latter being pictured below.
There were as of this writing more than seven thousand points of sale for the iPhone in Greater China. In total, iPhone has 120,000 points of sale around the world and iPad and iPod are now carried in 40,000 and 50,000 points of sale, respectively. They should open at least 25 new stores in China within the next few years and 40 outlets around the world in the next quarter, with 30 outside the United States.
Other markets to watch? More after the break…
Apple’s Nanjing East Road store in Shanghai
Apple also displayed a noteworthy growth in Brazil and Russia. Quarterly revenues from Brazil topped $900 million, an 118 percent year over year increase. Foxconn, Apple’s contract manufacturer, is building a $12 billion iPad plant in Brazil and the country’s Minister of Science and Technology Aloizio Mercadante went on the record promising iPads made in Brazil by December (Foxconn may have already shifted a portion of iPhone production to Brazil). Watch Russia closely, too, where Apple’s products are a must-have among the elite, but also a growing number of middle-class consumers. For what it’s worth, Cook told analysts that Russia was looking “more promising” and highlighted “significant opportunities” in the Middle East region.