But the iPhone maker hasn’t always been able to count on such a solid performance in the market.
Again analysts are optimistic that Apple’s success in China in the last quarter was not an anomaly.
“China was like a thorn alongside Apple,” said Dan Morgan, senior portfolio manager at Synovus Trust Company. “Now the pendulum has completely swung to the other side.”
A key market
Although sales in China have not always been stable in recent years, the market remains crucial for Apple.
The country’s large middle class has great purchasing power. Mobile applications for services such as shopping and banking services are particularly popular with Chinese consumers, allowing Apple to generate more additional revenue through its App Store and software services. And there is still room for growth – Apple’s Global 2020 smartphone the market share was 14.8%, but it was only 10.1% in China, according to Gartner data.
China is expected to account for around 20% of total iPhone upgrades in the coming year, Wedbush analyst Dan Ives said in a note to investors last week. China remains “a key ingredient” to Apple’s success, he added.
“We listen very carefully to our customers there and end up creating things based on that that are then given to the world,” Cook said. “We are getting a lot of feedback from China.”
“ A record number of developers ”
The iPhone 12 was a major contributor to Apple’s China sales growth in its last quarter, although Cook said during the earnings call that other products, including the iPad and wearable devices, also helped.
There are many reasons the iPhone 12 was set to be particularly popular in China, where Cook said there were “a record number of upgrades” during the holiday season. One of the reasons is that China’s 5G networks are more robust than in many other markets, which is more of an incentive for consumers to upgrade. In the United States, on the other hand, people may have to wait until 5G becomes more widely available.
“(There has been) very aggressive development of 5G in China; in the United States we are getting there, but we have not been as committed,” said Morgan of Synovus.
The Chinese economy has also recovered from the pandemic-related slowdown faster than other countries – it is currently about two quarters ahead of Western Europe and North America, the analyst said. Gartner Annette Zimmermann – so her consumers could have more money to spend on new devices. According to Gartner, Apple sold 8% more smartphones in China in 2020 compared to the previous year, and that number only includes about two months of iPhone 12 sales.
“We will still see very positive growth over the next two quarters,” Zimmermann said. “There are a good number of people who have yet to move to the next generation and (who will be) driven by 5G.”
Apple’s continued strong growth in China will likely depend in part on analyst forecasts of an upcoming iPhone 12 “supercycle” upgrade – and many still believe it will.
“I am optimistic that these December figures on China are not just a quick aberration,” Morgan of Synovus said. “I am optimistic that we are, in fact, going to get this cycle and that this quarter was proof that it is starting.”