Thanks to iPhone 6, Apple killing it in China amid stiff competition
The frenzy for Apple products was apparent when I was traveling in China two months ago.
While taking a break from wandering around Shanghai’s bustling, neon-lighted East Nanjing Road, a twenty-something guy spotted me using my iPhone 6 and, with a look of envy, asked if “ping guo” -- Chinese for “apple” -- was extremely popular in the U.S.
Confused, I responded in halting Chinese: “Um, yeah I guess Americans really like apples ... and other fruit...” After we sorted out the misunderstanding, he went on to say that everyone he knew wanted an iPhone and that it was the most coveted product among Chinese consumers.
So it came as little surprise that Apple had an epic first quarter in China.
Revenue in the company’s “Greater China” region -- encompassing China, Taiwan and Hong Kong -- totaled $16.1 billion, an astonishing 70% year-over-year increase.
That was by far the biggest percentage increase by region for the Cupertino company; in comparison, Apple’s Americas revenue rose 23% compared with the same quarter a year earlier.
“The emerging markets, which has been a source of great questions over time -- the growth was absolutely stunning in Brazil and mainland China,” Chief Executive Tim Cook said during a call with analysts on Tuesday.
Year-over-year iPhone sales doubled in China, although the company didn’t specify how many units were sold there. China is Apple’s second-largest market for iPhones.
Apple did so well during the quarter that it took the top spot in China for smartphone shipments, a first for the company, according to a report released Tuesday by research firm Canalys. In the No. 2 spot was Xiaomi, followed by Samsung and then Huawei.
“This is an amazing result, given that the average selling price of Apple’s handsets is nearly double those of its nearest competitors,” Canalys said. “While Chinese smartphone vendors are quickly gaining ground internationally, Apple has turned the tables on them in their home market.”
What’s driving that stunning demand? Apple’s iPhone 6 and 6 Plus, which finally gave Chinese consumers what they know and love: large-screen smartphones.
Many Chinese consumers use their phones as their primary -- and oftentimes only -- Internet-connected device, so big screen sizes are a huge draw. For years, Apple held out on supersizing its phones; now that it has, Chinese consumers are flocking to snap them up.
The iPhone 6 and 6 Plus went on sale in China on Oct. 17, nearly a month after they became available in the U.S. and other countries. But the delay clearly didn’t hurt sales.
“The excitement around the iPhone 6 and 6 Plus were absolutely phenomenal and you can see that in the results,” Cook said. “We’re a big believer in China: We’re looking at our investment, we’re growing the number of stores.”
Apple is more than doubling its number of greater China stores by mid-2016, to 40 in all. It already opened two stores in the region this month.
To get the new retail locations off the ground, Apple’s Angela Ahrendts, the company’s senior vice president of retail and online sales, has reportedly been wooing store employees to relocate to China.
Apple’s sales from online channels in Greater China are also booming: Online revenue in greater China last quarter was more than the sum of the previous five years, Cook said.
Follow Andrea Chang on Twitter.
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