- Getty Images/Justin Sullivan
Apple CEO Tim Cook says China is doing just fine. At least, for Apple.
On the company’s earnings call Tuesday afternoon, Cook was asked whether he saw any slowdown in China.
The short answer: No.
“Frankly if I were to shut off my web and shut off the TV and just look at how many customers are coming into our stores regardless of whether they’re buying, how many people are coming online, and in addition looking at our sales trends, I wouldn’t know that there was any economic issue at all in China. And so I don’t know how unusual we are with that, I think there’s a misunderstanding probably, particularly in the Western world, about China’s economy, which contributes to the confusion.”
In other words, if Tim Cook didn’t read about bad news in China, then he would have no idea anything was wrong there, because it’s all good for Apple.
Apple reported a solid quarter overall. It earned $11.1 billion in net income on $51.5 billion in revenue, driven by sales of 48 million iPhones. All of those numbers were roughly in line with expectations.
Before the release of the earnings report, people were curious to see how Apple’s growth in China held up.
China has been one of the major economic stories this summer, as its economy is hitting a rough patch. Here’s a quick rundown of the headlines on China:
Its market collapsed. The government devalued its currency to prop up exports. Its central bank cut interest rates. Its growth is at its lowest point in 25 years.
With China in trouble, a lot of people worried that Apple would be in trouble. China has been a major driver of Apple’s growth in the past 12 months. Here’s a look at what it has done:
- In fiscal Q1, sales in Greater China wereup 70% year-over-year, compared with 30% for the company as a whole. In fiscal Q2, sales in Greater China wereup 71% year/year, compared with 27% for the company as a whole. In fiscal Q3, sales in Greater China were up112% year/year, compared with 33% for the company as a whole. In fiscal Q4 (the quarter Apple just reported), sales in Greater China were up 99%, compared with 22% for the company as a whole.
Cook says the iPhone grew 87% year-over-year and was the top-selling phone in China. The iPhone 6 Plus was the third-best-selling phone in China. He also noted that the Chinese smartphone market contracted when excluding iPhone sales. This means the iPhone is growing in China, while Android smartphone sales are in decline.
For anyone worried about Apple in China, this should provide a level of assurance.
Cook cautioned that he didn’t think Apple could withstand major economic shocks in China, but he said that for now, “You really can’t tell the difference, if you look at our daily and weekly numbers.”