Image: Wesson Wang via Unsplash
Apple’s China sales fell in the June quarter, with CEO Tim Cook remaining optimistic about long-term prospects. However, mainland Chinese sales will not benefit from Apple Intelligence yet, as it is not being rolled out to local users, South China Morning Post reported.
The California-based tech giant’s revenue in the Greater China region, including Hong Kong and Taiwan, was $14.73 billion in the June quarter, a 6.5% decline compared to last year. Apple noted that over half of this drop was due to foreign exchange fluctuations, with the market declining less than 3% on a constant currency basis. Sales in the Greater China region missed the average analyst estimate of $15.26 billion, according to a Bloomberg poll.
Greater China, Apple’s third-largest market, was the only segment with declining sales. The company’s total revenue reached $85.8 billion in the quarter, beating analyst estimates. Cook expressed optimism about the China market, describing it as “the most competitive in the world” and noting business environment improvements in the first half of 2024.
“We continue to be confident in the long-term opportunity in China,” Cook said in a conference call with analysts. “I don’t know how every chapter of the book reads, but we’re very confident in the long-term.” He added that the mainland China market set a June quarter record for iPhone upgrades, which he called a “very strong signal.”
Despite the weakening China sales, Apple conducted rounds of rare and steep discounts during the quarter, causing the iPhone to fall out of the top 5 ranking of smartphone vendors in the world’s biggest handset market.
Canalys data showed that iPhone shipments in China declined 2% year on year in the three months ending in June, bumping Apple down to No. 6 on the list of top vendors by shipments. This marked the first time in years that Apple has been out of the top 5 in one of its most important markets.
While Apple is betting on its artificial intelligence (AI) features to drive the next round of growth, uncertainties remain about when the company can bring Apple Intelligence to regions including China and the European Union (EU) due to stringent regulatory frameworks. Cook told analysts that Apple is “very constructively engaged” with regulatory bodies in China and the EU and aims to bring AI features to all users once they understand and meet regulatory requirements.
The debut of Apple Intelligence’s beta version on its newly released iOS 18.1 excluded China, casting a shadow over the company’s prospects in the market where it is already losing ground.
