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China Focus: Apple fever begins to fade in China
[July 24, 2013]

China Focus: Apple fever begins to fade in China

BEIJING, Jul 24, 2013 (Xinhua via COMTEX) -- After being adored for years by Chinese customers who would queue for hours outside Apple stores ahead of product launches, sales of Apple products fell for the first time in Greater China, which includes mainland China, Hong Kong and Taiwan.

The company's financial report revealed that its sales from the region in the quarter ended June 29 plummeted 43 percent from the previous quarter and 14 percent from the same period last year.

Analysts contribute the slump to Chinese customers' love for bigger screens and fierce competition from cheaper smartphones that run Google Inc.'s Android operation system.

--Profits and sales fall According to Apple's third quarter financial report, the company's net profit in the quarter ended June 29 stood at 6.9 billion US dollars, down 21.6 percent from 8.8 billion US dollars in a year earlier. Per-share profit fell 19.8 percent year on year to 7.47 US dollars.

Beating previous estimates, the company sold 31.241 million iphones in the quarter, up 20 percent year on year. However, compared with the previous quarter, sales fell 17 percent and accordingly revenues fell 21 percent.

Besides, Apple sold 14.617 million iPads during the period, down 14 percent year on year and 25 percent on quarter, and 3.754 million Mac laptops, down 7 percent on year and 5 percent on quarter. Sales of iPods, at 4.569 million, fell the most among Apple's various products, down 32 percent on year and 19 percent on quarter.

The U.S. was still the biggest market for Apple, whose revenue from the region reached 14.4 billion US dollars, up 12 percent on year and 3 percent on quarter. Revenue from Japan rose 27 percent on year to 2.543 billion US dollars. However, the company saw revenues from other regional market fall both on year and on quarter.

In Greater China, for which Apple broke out sales numbers since the quarter ended December 29, 2012, revenue fell 14 percent on year to 4.64 billion US dollars, which represents a 43 percent slump from the previous quarter.

--Intense competition Analysts say Chinese customers' increasing preference for bigger phone screens has affected sales of iPhone 5, whose screen is not big enough and while ompetitors like Samsung have launched big screen phones like the Note series.

Besides, local brands are nibbling market share with cheaper smartphones that run Google Inc.'s free Android operation system.

"There is an obvious trend that Apple's market share in China are nibbled by local brands, which have been growing very rapidly," says telecommunication analyst Fu Liang. "Not only Apple, Samsung will also face the competition in the future".

Also there are seasonal reasons for the gloomy sales figure in the third quarter. Apple customarily launches new products in Autumn and some fans would wait until the fourth quarter to make their purchases. According to market watchers, May, June and July are usually the off-season for sales of phones and Apple is no exception.

(Edited by Huang Xiaolan, [email protected])

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