Apple CEO Tim Cook Says Performance in China Has Improved Over Previous Quarter

Apple today announced its earnings results for the second fiscal quarter (first calendar quarter) of 2019, and ahead of the company's upcoming earnings call, Apple CEO Tim Cook shared some remarks on Apple's results with CNBC.

According to Cook, Apple's performance in China improved over the previous quarter and saw greater strength towards the end of the quarter.


A sales tax cut in the country decreased the price of Apple products, and Apple also made its own pricing adjustments in the country. Cook also told CNBC that the trade relationship between the U.S. and China had improved, resulting in a "much better" tone.
"The tone is much better than it was in the November-December timeframe. I think that affects consumer confidence in a very positive way," Cook said.
Apple had $10.22 billion in sales in its Greater China category, which includes Taiwan and Hong Kong.

During the quarterly earnings call, Cook said that while worldwide revenue was down 17 percent, declines were smaller in the final weeks of the March quarter. Apple says that November and December were the most challenging months, which is an encouraging trend.

Apple reported revenue of $58.02 billion and earnings per share of $2.46. Apple's guidance for the third fiscal quarter of 2019 is $52.5 to $54.5 billion, higher than analyst expectations and an indication that iPhone sales in China are stabilizing.


This article, "Apple CEO Tim Cook Says Performance in China Has Improved Over Previous Quarter" first appeared on MacRumors.com

Discuss this article in our forums

Apple’s iPhone Sales in China Down an Estimated 30% in Q1 2019, Huawei Continues to Dominate

Apple's iPhone sales in China were down 30 percent during the first quarter of 2019, according to new shipment estimates shared today by Canalys.

Apple shipped an estimated 6.5 million iPhones during the quarter, marking its worst decline in two years. It shipped fewer smartphones in the country than Chinese vendors Xiaomi, Vivo, Oppo, and Huawei, coming in as the number five brand in China.


Huawei, the top vendor in China during Q1 2019, shipped 29.9 million smartphones for 34 percent market share. Huawei saw impressive growth during the quarter, with smartphone sales up 41 percent. Other smartphone vendors in China also saw drops in smartphone sales, though not as dramatic as Apple's decline.


Apple held just 7.4 percent market share in China during Q1 2019, down from 10.2 percent in the year-ago quarter. According to Canalys analyst Mo Jia, introducing features like 5G is "vital" to prevent iPhone demand in China from shrinking even further.
Apple's performance in China is concerning, given that the worst quarter for iPhone shipments is usually Q2 or Q3, not Q1 when new devices are still fresh. Apple has acted to cut iPhone retail prices, which has largely relieved the pressure from its channel partners. Despite the iPhone's installed base in China being well over 300 million, it is vital that Apple prevents users deserting it for Android vendors. Apple faces a challenge in China to localize its software and services offerings as quickly as in Western markets. Its hardware is therefore more exposed to competition in China than elsewhere. Bringing up-to-date features, such as 5G, next year, as well as localized software is vital to prevent demand shrinking further.
Overall smartphone shipments in China fell to 88 million units, the market's worst performance since 2013 and a three percent drop from the year-ago quarter. Huawei managed significant growth in China through increased investments in brick and mortar stores, a wider offering of consumer IoT devices, and penetration of rural markets with low cost smartphones.


Apple is set to announce its earnings results for the second fiscal quarter of 2019 (first calendar quarter) this afternoon. Apple is expecting revenue between $55 billion and $59 billion, a decline from the $61.1 billion reported in 2018.

Apple is no longer disclosing iPhone, iPad, and Mac sales, which means there is no longer access to specific sales data to confirm analyst estimates.

Tags: China, Canalys

This article, "Apple's iPhone Sales in China Down an Estimated 30% in Q1 2019, Huawei Continues to Dominate" first appeared on MacRumors.com

Discuss this article in our forums

Apple Lowers Prices of iPhones, iPads, Macs, AirPods, and More in China as VAT Cut Takes Effect

Apple has lowered the prices of several products in China this week, including the latest iPhones, iPads, and AirPods.


As noted by CNBC, the iPhone XR now starts at 6199 RMB on Apple's online store in China, nearly five percent lower than its previous 6499 RMB price tag. The higher-end iPhone XS and iPhone XS Max models each received a 500 RMB price cut as well and now start at 8,199 RMB and 9,099 RMB respectively.

Likewise, the second-generation AirPods with the standard Lightning charging case now start at 1,246 RMB, down slightly from 1,279 RMB, and the 11-inch iPad Pro has been discounted to 6,331 RMB from 6,499 RMB previously.

The price cuts appear to be due in part to a reduction in China's value-added tax (VAT) that went into effect today to help boost the economy there, but regardless of the reason, any price cut could be good news for Apple as it seeks to bolster sales in China.

Last quarter, Apple issued its first revenue warning in 16 years due to "fewer iPhone upgrades" than it anticipated and "significantly greater" than expected economic weakness in the Greater China region. Apple already discounted iPhone prices at third-party resellers in China to improve results.

Tag: China

This article, "Apple Lowers Prices of iPhones, iPads, Macs, AirPods, and More in China as VAT Cut Takes Effect" first appeared on MacRumors.com

Discuss this article in our forums

Tim Cook Travels to China, Meets With Vice Premier and Developers

Apple CEO Tim Cook is in China this week ahead of the annual China Development Forum that promotes economic growth in the country.


Cook was photographed at an Apple Store in Beijing's central Wangfujing shopping district on Thursday, where he attended a music-related Today at Apple session. On Friday, Cook met with developers and visited the Palace Museum, which has an ARKit-based app that offers tourists an immersive experience.

Later on Friday, Cook met with politician Sun Chunlan, a Vice Premier of the People's Republic of China. The state-run news agency Xinhua claims that Sun made positive remarks about Apple and the company's role in Sino-U.S. relations.


Cook, who has shared pictures of his trip on Weibo, is reportedly set to attend the annual China Development Forum in Beijing on Saturday. Cook co-chaired the event in 2018, calling for stronger data privacy regulations in the wake of the major Facebook and Cambridge Analytica data scandal.

Cook will then likely take a direct flight back to California in time for Apple's media event on Monday at Steve Jobs Theater, where the company is widely expected to introduce two new services for streaming video and magazines/newspapers.


This article, "Tim Cook Travels to China, Meets With Vice Premier and Developers" first appeared on MacRumors.com

Discuss this article in our forums

Chinese Online Retailers Start Second Round of iPhone Discounts

Online retailers in China have begun discounting iPhones for the second time this year. Reuters reports that several mobile vendors this week announced discounts on iPhone models, including Apple's latest flagship iPhone XS and iPhone XS Max.

Gadget retailer Suning.Com Co Ltd said it would slash the price of the iPhone XS by as much as 1,000 yuan ($148.95) from its official price. Suning had lowered the prices of other iPhone models in January along with other retailers, but those cuts excluded the iPhone XS.

Pinduoduo Inc, an e-commerce site best known for selling inexpensive goods, has also said it would sell the 64GB edition of the iPhone XS for 6,999 yuan, a drop of over 1,000 yuan from the official price.
JD.com is also reportedly poised to offer discounts on its Apple products, including the iPhone XS and XS Max, which escaped the online retail giant's first major round of discounts in January.

Apple first dropped iPhone prices for third-party distributors in China on January 10, allowing vendors to purchase iPhones more cheaply and pass those savings on to customers. Apple cut prices on most iPhone models, but the XR saw the biggest discounts.

Apple launched the price cuts after seeing iPhone sales fall significantly in China during the holiday quarter of 2018, leading to lower iPhone revenue than expected. One report said Apple was seeing improved iPhone sales in China following the price cuts.

Apple has also partnered with Ant Financial, the finance arm of Alibaba Group Holding Ltd, and several state-owned banks to let consumers purchase iPhones via interest-free loans.

Apple CEO Tim Cook said in January that the company was reevaluating its pricing strategies in some international markets, returning to pricing that's "more commensurate" with what local prices were last year to boost its iPhone sales.

Cook also said he believes Apple's higher prices were a factor in the declining number of iPhone upgrades that led to a weaker holiday quarter. In some international markets, the strength of the U.S. dollar amplified pricing increases.

Related Roundups: iPhone XS, iPhone XR
Tag: China

This article, "Chinese Online Retailers Start Second Round of iPhone Discounts" first appeared on MacRumors.com

Discuss this article in our forums

Apple Launches Promo in China Offering Interest-Free Financing When Purchasing New iPhone

Apple is teaming up with Chinese payments company Ant Financial Services Group, along with several local banks, to offer local customers interest-free financing on iPhones in China (via Reuters). Apple is continuously looking to boost smartphone sales in China, and this appears to be the latest move in the company's long-term plan to do so.


On its China website, Apple explains that customers can pay 271 yuan ($40.31) per month for the iPhone XR, and 362 yuan ($53.87) per month for the iPhone XS. If customers trade in older models of iPhone, they'll get cheaper installment plans.

In total, customers buying an iPhone worth a minimum of 4,000 yuan (around $595) will qualify for interest-free financing that can be paid over three, six, nine, 12, or 24 months.

Apple has always struggled with iPhone sales in China, and according to Strategy Analytics, the company shipped an estimated 2.5 million fewer iPhones in China in 2018 than in 2017. The company's products have historically been categorized as too expensive for the China market, losing out to low-cost alternatives from popular local rivals like OPPO, Vivo, and Xiaomi.

In recent weeks, reports have suggested that Apple is seeing improved iPhone sales in China thanks to recent price cuts to the iPhone XR, XS, XS Max, and older models. According to Feng, data sourced from Alibaba suggests that iPhone sales on the site have increased by 76 percent in China since January 13, 2019.

The launch of China's limited-time promotion follows similar offers that have rolled out to a few regions around the world, including a trade-up promo in the United States. In emails sent to customers and on its website, Apple encourages shoppers to upgrade to an iPhone XR from $449 or iPhone XS from $699, with the trade in of an iPhone 7 Plus or iPhone 8.

Tag: China

This article, "Apple Launches Promo in China Offering Interest-Free Financing When Purchasing New iPhone" first appeared on MacRumors.com

Discuss this article in our forums

Red iPhone XS and XS Max Rumored to Launch in China This Month, Again Dropping PRODUCT(RED) Branding

A red variant of the iPhone XS and XS Max could be launching in China sooner rather than later, if a social media rumor proves to be accurate.


A Weibo post spotted by iPhoneHacks.com claims Apple will launch the red color models by the end of this month, in a bid to boost struggling iPhone sales in the region.

The leaker, who claims to have received the tip from sources in Apple's supply chain, says that Apple will call the model "China Red," and not the PRODUCT(RED) branding that the company typically associates with the color.

Apple globally launched a mid-cycle (PRODUCT)RED edition iPhone 7 and iPhone 7 Plus in March 2017 and a similar edition for the iPhone 8 and iPhone 8 Plus in April 2018, so the timing wouldn't be completely off. Apple already sells a (PRODUCT)RED variant of the iPhone XR.

There's also precedent for Apple using a different name in China – the company dropped the PRODUCT(RED) branding in the country for both the iPhone 7 and iPhone 8 models, instead promoting them simply as additional colorways.

Apple has partnered with the (RED) Global Fund for nearly 13 years to sell a variety of red-colored devices and accessories. For each product sold, Apple makes an unspecified contribution to HIV/AIDS charity. However sex remains a controversial issue in China, where AIDS and HIV have been characterized in the past as a consequence of contact with the West.

Despite the lack of any PRODUCT(RED) mention in China, Apple CEO Tim Cook assured MacRumors in a March 2017 email that the company upholds its charitable Global Fund donations commitment for every special edition red iPhone sold in every country in the world, with or without said branding.

If there's any weight to today's rumor of a red iPhone XS and XS coming to China, it could potentially signal the early launch of PRODUCT(RED) versions for the rest of the world, although nothing is certain. Rumors last year of a mid-cycle PRODUCT(RED) edition of the iPhone X never transpired, for example.

It's also worth noting that several Chinese mobile makers will be launching their 2019 flagship phones over the next couple of months, so Apple may be using new red iPhone models as a counterweight to new rival devices on the market.


This article, "Red iPhone XS and XS Max Rumored to Launch in China This Month, Again Dropping PRODUCT(RED) Branding" first appeared on MacRumors.com

Discuss this article in our forums

iPhone Sales Growing Following Price Cuts in China

Apple is seeing improved iPhone sales in China following some recent price cuts on the iPhone XR, XS, XS Max, and older models that were introduced earlier in January, reports Chinese site Feng.

Apple dropped iPhone prices for third-party distributors in China on January 10, allowing vendors to purchase iPhones more cheaply and pass those savings on to customers. Apple cut prices on most iPhone models, but the XR saw the biggest discounts.


Shortly after Apple implemented the pricing cuts, vendors in China started offering discounts on various iPhone models. The XR, for example, was available from JD.com for 6099 yuan ($899), while Suning, an electronics store similar to Best Buy, started selling iPhone XR for 6199 yuan ($914).

Those prices are more affordable than the iPhone XR from Apple's own online store, where the device is priced starting at 6499 yuan ($958).

According to Feng, data sourced from Alibaba suggests that iPhone sales on the site have increased by 76 percent in China since January 13. Suning, meanwhile, saw Apple traffic and sales "explode" with the iPhone 8, 8 Plus, and XR in particular seeing purchase boosts. Apple sales from Suning have increased by 83 percent since January 11.

Apple launched the price cuts after seeing iPhone sales fall significantly in China during the holiday quarter of 2018, leading to lower iPhone revenue than expected. The Cupertino company is hoping sales will soar during Chinese New Year in February, improving overall performance in China.

Apple is also promoting older iPhone trade-ins and monthly pricing for iPhones in many countries around the world, including the United States, in an effort to boost iPhone upgrade numbers.

Earlier this week, Apple CEO Tim Cook said that Apple is reevaluating its pricing strategies in some international markets, returning to pricing that's "more commensurate" with what local prices were last year to boost its iPhone sales.

Cook also said that he does believe Apple's higher prices were a factor in the declining number of iPhone upgrades that led to a weaker holiday quarter. In some international markets, the strength of the U.S. dollar amplified pricing increases.

Apple is expecting revenue of $55 to $59 billion in the second fiscal quarter of 2019 (first calendar quarter), which is below the $61.1 billion in revenue Apple earned in the second fiscal quarter of 2018. It's not clear if the pricing changes in China and other international markets will be a big enough boost to pull Apple out of its slump going forward, but for the first part of the year, Apple is still expecting lower iPhone sales.

Related Roundups: iPhone XS, iPhone XR
Tag: China

This article, "iPhone Sales Growing Following Price Cuts in China" first appeared on MacRumors.com

Discuss this article in our forums

Strategy Analytics: Apple Shipped an Estimated 2.5 Million Fewer iPhones in China in 2018 Than in 2017

Apple shipped an estimated 34.2 million iPhones in China in 2018, down from 36.7 million in 2017, according to new data shared today by Strategy Analytics.

During the fourth calendar quarter of 2018 (Apple's first fiscal quarter), Apple shipped 10.9 million iPhones, down from 14 million in the fourth quarter of 2017.


Apple surpassed Xiaomi to become the number four smartphone vendor in the country, but its iPhone sales fell short of Huawei, OPPO, and Vivo, all Chinese companies that make more affordable smartphones.


For 2018 in total, Apple came in fifth in China, trailing behind the four major Chinese smartphone vendors. Huawei was the number one vendor in China, shipping an estimated 105.1 million smartphones during the year. OPPO shipped 82.8 million, Vivo shipped 79.3 million, and Xiaomi shipped 50 million.

Apple lost market share in the fourth quarter of 2018, but gained ground overall in 2018. Apple held 10.1 percent of the smartphone market in the fourth quarter of 2018, down from 11.5 percent in the fourth quarter of 2017. Apple's total 2018 marketshare was 8.4 percent, up from 8 percent.


Despite the slight year-over-year jump, Apple trails all major Chinese smartphone vendors in the country when it comes to market share, including Huawei, OPPO, Vivo, and Xiaomi.

Fourth quarter smartphone shipments in China declined by 11 percent annually, with a total of 107.9 million units shipped by all vendors. That's down from 121.3 million in the fourth quarter of 2017. Smartphone shipments also fell 11 percent annually, with 408.5 million smartphones shipped in China in 2018 down from 459.6 million in 2017.

Overall smartphone shipments have declined for five consecutive quarters in China, which has heavily impacted Apple. Apple recently downgraded its guidance for the first fiscal quarter of 2019 (which is the fourth calendar quarter), blaming the move on poor iPhone sales, primarily in China.

Strategy Analytics Director Linda Sui said that the holiday quarter was Apple's worst performance since early 2017. Apple's iPhone shipments have dropped on a year-over-year basis in China for 8 of the last 12 quarters.
Apple has been under pressure in China for the past three years. Ongoing patent battles with Qualcomm are a distraction, while Apple is being heavily criticized for its expensive retail prices. Apple is in danger of pricing the iPhone out of China."
To boost sales in China, Apple has cut the prices of its iPhones for third-party distributors in China, allowing distributors to provide iPhones at lower prices for Chinese customers. The biggest discounts have been on the iPhone XR.

Apple's lowered pricing comes just ahead of the Chinese New Year in February, with Apple hoping the discounts will lure shoppers into purchasing a new iPhone during the holiday.


This article, "Strategy Analytics: Apple Shipped an Estimated 2.5 Million Fewer iPhones in China in 2018 Than in 2017" first appeared on MacRumors.com

Discuss this article in our forums

HomePod Now Available for Purchase in China and Hong Kong

Apple earlier this week announced that the HomePod would be available in China and Hong Kong on Friday, January 18, and as promised, the smart speaker is now available for purchase in both locations.

HomePod is priced at 2,799 yuan in China and HK$2,799 in Hong Kong.


In addition to being available from the Apple online store and Apple retail stores, Apple Authorized resellers in China and Hong Kong are also offering the HomePod for sale.

Apple's Phil Schiller said that the company is excited to bring HomePod to China and Hong Kong in a statement made when the launch was announced.
We're excited to bring HomePod to our customers in mainland China and Hong Kong markets. We can't wait for them to experience how great it sounds in their home, we think they are going to love it.
Ahead of the launch of the HomePod in China and Hong Kong, Apple added Siri support for Cantonese and Mandarin in China and a Cantonese dialect in Hong Kong in a software update released in December.

HomePod was first introduced in the United States, UK, and Australia almost a year ago, and has since expanded to Canada, France, Germany, Spain, and Mexico, in addition to China and Hong Kong.

Related Roundup: HomePod
Tag: China
Buyer's Guide: HomePod (Neutral)

This article, "HomePod Now Available for Purchase in China and Hong Kong" first appeared on MacRumors.com

Discuss this article in our forums