Tim Cook: Apple Saw 'Great Improvement' in China in Q3 2019

Thanks to trade-in programs and other promotions, Apple saw significant improvement in iPhone sales in China, Apple CEO Tim Cook said today during today's earnings call covering the third fiscal quarter of 2019.

Cook said that Apple saw "great improvement" in China, returning to growth in constant currency in Greater China with improvements in year-over-year ‌iPhone‌ performance compared to the last two quarters.

We're happy with our performance across the board, including a return to growth in mainland China. We accomplished this despite strong headwinds from foreign exchange, which impacted the top-line growth rate by 300 points compared to a year ago, equivalent to $1.5 billion of revenue. In constant currency, our revenue grew in all five of our geographic segments.

Cook went on to say that Apple is "encouraged" by the results of the initiatives it launched earlier this year, with the company seeing a strong customer response to in-store trade-in and financing programs. ‌iPhone‌ in retail and online stores returned to growth on a year-over-year basis in June, said Cook, and the active installed base of ‌iPhone‌ users reached a new all-time high.

Despite the improvements, ‌iPhone‌ revenue was down during the quarter. The ‌iPhone‌ brought in $26 billion, down from $29.5 billion in the third quarter of 2018. For the first time, the ‌iPhone‌ was responsible for less than half of Apple's revenue, with services and wearables making up for the decline in sales.

Cook said that later this year, Apple has "several new products" that it can't wait to share with customers, without going into details. Apple also has multiple services on the horizon, including Apple Card (coming in August), Apple Arcade, and Apple TV+.

Tags: China, earnings

Top Rated Comments

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Bawstun

8 months ago

“Great improvement” is codespeak for only a -4.X% decline instead of the double digits in the -20%’s of the last two quarters, lol.

Rating: 7 Votes

Bawstun

8 months ago

Good news for investors.

It’s hard for me as a consumer to care. So I don’t. I think I’m a bit on China overload where Apple is concerned. Tim seems enamored of their market in a way that seems almost personal. Maybe it’s my imagination but I think I see more animation and enthusiasm when he is talking about China related topics than I detect in his speech about other aspects of Apple’s business.

But it’s an interesting tidbit of business news after so many news articles highlighting their struggles in China. I really hadn’t expected any of their initiatives to work because I thought their problems in China went beyond price sensitivity.

Sales declined over 4% in China. It hasn’t worked, it’s just media spin. I mean, compared to the 20%+ decline of the past two quarters, I guess a 4.% loss is an improvement, technically, but it’s still a loss and hasn’t been reversed into a gain. I doubt they ever will.

Rating: 7 Votes

now i see it

8 months ago

Cook said that later this year, Apple has "several new products" that it can't wait to share with customers, without going into details.

did someone leave a broken record spinning on the turntable?

Rating: 5 Votes

Mactendo

8 months ago

as it ships from China to its local stores or direct from factory, I am surprised Apple does not sell these cheaper as there is no shipping by sea or air to contribute to the overhead.

If Apple sold iPhones there cheaper on purpose, then the gray market would export them to other countries.
There is already an issue with phones from Hong Kong being resold to China, because in Hong Kong iPhones are cheaper due to lower local taxes.

Rating: 2 Votes

masotime

8 months ago

Despite the improvements, iPhone revenue was down during the quarter. The iPhone brought in $26 million, down from $29.5 billion in the third quarter of 2018.

I'm guessing that should be $26 billion

Rating: 2 Votes

code-m

8 months ago

iPhones are manufactured in China, as there are no tariffs (I don’t believe) as it ships from China to its local stores or direct from factory, I am surprised Apple does not sell these cheaper as there is no shipping by sea or air to contribute to the overhead.

Rating: 1 Votes

69Mustang

8 months ago

But he says ‘return to growth’?

You have to know how to interpret C-Suite speak. iPhone sales were down 20% in China last quarter. They are only down 4% this quarter. -20% to -4% is a 16 point increase, thus a return to growth. He's technically right. The language is ambiguous enough for the layman to infer that he means "return to growth" as in a return to positive numbers, not smaller negative numbers.

Rating: 1 Votes

Mactendo

8 months ago

I get it, but it’s kinda... very perverted...

Sales were 100 units, the next quarter sales were 80 units (20% less), the next quarter sales are 77 units and it’s being called a return to growth...

Rating: 1 Votes

69Mustang

8 months ago

That's the way it's always been. Plain spoken language has no place in business. Never has. Probably never will. Unfortunate, I know.

Rating: 1 Votes