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Apple Inc.’s (NASDAQ:AAPL) third-quarter earnings report has outperformed expectations, even with a 6.5% YoY sales decrease in Greater China. However, CEO Tim Cook continues to remain bullish about the company’s long-term prospects in the region.
What Happened: During the earnings call, Cook revealed that the sales decrease in Greater China was less than 3% on a constant currency basis, suggesting that over half of the decline was currency-related.
Despite the decrease, Cook pointed out several positive indicators. The iPhone install base in Greater China set a record, and Mainland China saw a June quarter record for upgraders. The Kantar survey for the quarter showed iPhones as the top three models in urban China.
Cook also mentioned that the majority of customers in Mainland China were buying Mac and iPad products for the first time. The iPad returned to growth in Greater China during the quarter, mirroring its performance worldwide, he said.
“We continue to be confident in the long-term opportunity in China. I don’t know how every chapter of the book reads, but we’re very confident in the long-term,” Cook stated.
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Why It Matters: In July, it was reported that Apple’s market share in China dropped to 14%, a decrease of two percentage points from the same period last year, according to data from Canalys. This was due to intensifying competition, with Huawei Technologies witnessing a significant increase in smartphone shipments.
However, Apple has been making strategic moves to strengthen its position in the region. In June, the company was in talks with several Chinese companies, including Baidu Inc and Alibaba Group Holding Limited, to integrate artificial intelligence (AI) functions into its devices sold in China.
Meanwhile, Cupertino’s revenue increased by 4.9%, totaling $85.78 billion for the quarter, surpassing the average analyst estimate of $84.53 billion, according to Benzinga Pro data.
Price Action: Apple shares were slightly up in after-hours trading at $219.60, at the time of writing. The stock closed Thursday's session down 1.68%, ending at $218.36.
Image Credits – Shutterstock.com
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Posted In: AAPL
