Apple Huge in China - Asian Mac, iPhone, iPad Sales Boom

| Apple Stock Watch

It turns out that Apple is big in China, and sales of Mac, iPhone, and iPad boomed throughout the Asia-Pacific region during the December quarter. Apple reported Tuesday that the company did US$2.6 billion in the “Greater China” market (China, Hong Kong, Taiwan) for Q1 — for context, that’s more than four times what the company did in that area for all of fiscal 2010 (quarter ending in September of 2010), meaning that Apple has arrived in the world’s largest market in a big way.

For additional context, Apple’s Greater China sales for the December quarter represents 49% of the company’s total revenue for all of fiscal 2001, just ten years ago. In 2001, Apple reported revenues of just $5.36 billion. Apple reported earnings for fiscal Q1 of 2011 of $26.84 billion on Tuesday.

Apple's Huge in China

Part of Apple’s growing success in China are the presence of just four Apple Store retail locations in the country. Apple CFO Peter Oppenheimer said in the company’s conference call with analysts Tuesday, “Our four stores in China were on average our highest traffic and our highest revenue stores in the world.”

That means four of the company’s newest Apple Stores in a market where Apple has historically performed poorly did more business than flagship stores in London, New York, San Francisco, Tokyo, and other major cities throughout the planet.

Achieving this was no mere fluke, according to Apple COO (and unofficial acting CEO now that Steve Jobs is on a new medical leave of absence). He told analysts that Apple has devoted significant resources to developing its business in China.

“Of the BRIC countries, Brazil, Russia, India, China,” Mr. Cook told analysts, “We several years ago identified China as our top priority, and we put enormous energy into China. The results of that have been absolutely staggering.”

He later added, “The revenue from Greater China for Apple for last quarter was $2.6 billion, which was up 4X from the prior-year quarter. And to further — just an exclamation point by that, we did a little over $3 billion for the entire year, fiscal year ‘10. So we are very, very proud of the team and the results that we have gotten there.”

Apple also identified the Korean and Japanese markets as areas of strong growth. iPhone sales doubled in Japan year-over-year, and overall revenue was up 83% over the prior year in the country. Apple didn’t provide specific numbers for Korea, but the company said that both iPad and iPhone are doing very well in that market.

It wasn’t just iOS devices leading the Apple charge in Asia, however, as Mac sales did very well in the region, too.

“We experienced strong sales growth in each of our geographic segments,” Mr. Oppenheimer said, “with over 50% growth in both the Asia-Pacific region and Japan. The growth was fueled primarily by strong demand for the new MacBook Air, which was launched in October, as well as continued strong sales of MacBook Pro.”

Tim Cook added that Mac sales were up 67% in Asia, and 56% in Japan. This compares to 23% growth around the globe for Apple’s Mac business, which itself far outpaced the global PC industry. Apple’s Mac sales in Asia outside of Japan have historically been very low, meaning the company has a lot of room for growth in the area, even more so than in the U.S.

All of these numbers add up to business in Asia becoming more and more important to Apple, and it’s clear that growth in the region is a big part of Apple transforming from a $6 billion a year company in 2001 to what could turn into a $70 or $80 billion a year company in 2011.

“If you look at our Asia Pacific business,” Tim Cook said, “the revenue growth was 175% or so, and this is incredible. The size business in Asia that we have now built is massive. To do $2.6 billion in China in three months, where just two years ago we did less than $1 billion in the whole year is phenomenal.”

He added, “It is clear that we are introducing a lot of people to Apple who previously had not been introduced to the Company.”

Sign Up for the Newsletter

Join the TMO Express Daily Newsletter to get the latest Mac headlines in your e-mail every weekday.

2 Comments

aardman

Why is it a surprise that Apple is big in China?  The Chinese are like the Japanese 25 years ago.  They’re the most brand conscious shoppers on the planet today.

nealg

People/Investors who wonder were Apple’s potential growth will be coming from just need to look at what is happening in China. I think this has been the most overlooked piece of the CC.  This is a huge opportunity for Apple. If Apple continues to be successful in China, they will have done what many other companies have wanted to there. The new CDMA phone could have a huge potential impact on China as could the iPad.

Log-in to comment