Apple's China sales up six-fold in fiscal third quarter

Apple COO Tim Cook said China has been key to the company's record quarterly results

Apple believes it is just "scratching the surface" of the Chinese market, as the company's revenue from the country for the quarter ended June 25 increased by more than six times from the same period last year.

In an earnings call on Tuesday, Apple Chief Operating Officer Tim Cook said the huge growth in "Greater China", which includes mainland China, Hong Kong and Taiwan, propelled the company's revenues in the market to US$3.8 billion in the quarter. For the past three fiscal quarters, total revenue from China amounted to $8.8 billion.

Cook said China was key to the company's quarterly revenue of $28.57 billion, which was up by 82 percent from the same quarter last year.

"I firmly believe that we're just scratching the surface right now," Cook said of the Chinese market. "I think there is incredible opportunity for Apple there."

Apple's iPhone sales have been a major driver for the company's booming sales in the Chinese market. For the first three months of 2011, iPhone sales in Greater China grew by almost 250 percent from the same period last year.

Apple began selling its iPhone 4 in mainland China last September, attracting long lines at the company's retail stores which were not immediately able to meet the booming demand for the device. Chinese consumers waited in lines outside stores once again in April, when Apple launched its white iPhone 4.

China has 900 million mobile phone users, according to official numbers, making the country a major market for handset manufacturers.

Apple, however, stumbled initially when trying to sell the iconic iPhone in China, according to analysts. It began officially selling the iPhone in mainland China by late 2009, more than two years after it was launched in the U.S. The iPhone that Apple sold also came without Wi-Fi capability, in order to meet Chinese technology regulations at the time.

But in 2010, the company ensured that it released its iPhone 4 device to China sooner, while also expanding its presence in the country. Apple opened two new retail stores in Beijing and Shanghai to coincide with the launch of its iPhone 4. The company also launched a new online store for mainland China last October, and started offering its App Store in simplified Chinese Mandarin, the written language officially used in the country.

The popularity of the iPhone has been a boon to China Unicom, the sole mobile carrier offering the iPhone in the country. China Unicom has about 180 million users. Apple is also in talks with the country's two other mobile carriers, China Mobile and China Unicom, to offer the iPhone. The two carriers together have more than 700 million mobile phone users.

Apple still has a smaller share of the China's smartphone market than its foreign competitors. During the first quarter of 2011, the company's market share was at 8.4 percent, according to Beijing-based research firm Analysys International. Nokia leads with a 22.1 percent share, while the market shares of Samsung and Motorola market were 18.1 percent and 12.9 percent respectively, Analysys said.

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Michael Kan

IDG News Service
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