China becomes Apple’s second-largest market, according to its new boss

20 October 2011 0 h 41 min 8 comments

On October 19, Apple Inc announced that China has become its second largest market after the U.S. as the company opened an online store last year and six retail outlets in the past three years in the country

Revenue from China accounted for 16% of total in its latest quarter, or $4.5 billion. “That’s up almost 4x or about 270% year-over-year”.

China accounted for 16 percent of fourth-quarter sales, or about $4.5 billion, Chief Executive Officer Tim Cook said on a conference call yesterday. Quarterly sales in China were up almost four times the year-ago level, he said.

Demand in China was a bright spot in Apple earnings. The Cupertino, California-based company’s China sales rose to $13 billion in the year ended Sept. 24, from $3 billion in the previous 12 months, Cook said.

“I’ve never seen a country with as many people rising into the middle class that aspire to buy products that Apple makes,” Cook said on the call. “So I think in China, the sky’s the limit.”

First market soon

China should be Apple’s largest market, and I think they are actually underperforming here,” said to Bloomberg haun Rein, managing director of China Market Research Group., a Shanghai-based company that advises retailers and other clients about operating businesses in China.

This future first position can be easily explained :

. China is already the world’s largest mobile phone market, by subscribers, with 940 million users registered at the end of August, according to the nation’s Ministry of Industry and Information Technology.
. the country will probably overtook the U.S. as the largest personal-computer market in the second quarter, after three decades of American dominance, according to research firm IDC.

Apple sales in China, Hong Kong and Taiwan rose to 12 percent of the company’s total last fiscal year, compared with 2 percent in 2009, Cook said on the call. “Revenue is growing at a feverish pace in the region, making it the company’s fastest growing by far,” he said.

Over 7,000 points-of- sale for the iPhone in China

In order to answer to this high demand, Apple is developing quickly its network. The company last month opened its first store in Hong Kong, as well as its third store in Shanghai. The company also has two outlets in Beijing.

“We now have 6 Apple stores in Greater China. With our highest opening day for Mac sales ever, our first store in Hong Kong store joins our 5 other China stores as the highest traffic and among our highest revenue stores in the world. It’s an area of enormous opportunity,” Cook said.

Apple has also a China network of more than 200 “Mono-branded Apple Premium Resellers” that are focused on the company’s products, Cook said. Combined with other types of resellers and partner China Unicom (Hong Kong) Ltd., the nation’s only carrier now offering the iPhone with a service contract, there are 7,000 points-of- sale for the iPhone in China, he said.

“How far can it go? I think it’s an area of enormous opportunity, and it has quickly become #2 on our list of top revenue countries very, very quickly. We’re obviously placing additional investment. We’re building more stores there as well as doing quite a few other things to continue to deliver our great products to the people of China.” was the conclusion of  the new Chairman of Apple.

SOURCES: Apple, Bloomberg, Seeking Alpha (19/10/2011)

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