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Apple pulls out all the stops to recover lucrative Chinese market

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China is continuing to resist the temptations of the glimmering iPhone as Apple revenues in the country have slipped for a sixth consecutive quarter.

Overall it has proved to be a successful quarter for the iChief, but influence in the worlds’ second largest economy is continuing to dip. $45.4 billion in total revenue was recorded for the period, representing a 7% increase, but performance in China slipped by 9.5% to $ billion. The iPhone has previously been seen as a status symbol in the country, but it would appear the glorious iLeader is not as indestructible as perhaps it thought.

And while there might have been a sense of calm across the earnings call, the duck metaphor might come to mind for some.

“If you look underneath the numbers, mainland China was actually flat year-over-year during Q3,” said CEO Tim Cook. “And in constant currency terms, we were actually up 6% in mainland China. And so we’re very encouraged about that.”

Cook might be giving the big iAm when it comes to China, but many estimates have Apple slipping down the market share rankings, with the number of iPhone sales decreasing quarter after quarter. He calm on the surface, but those tiny little legs are pumping hard beneath the surface, as the changes have been aplenty recently to re-establish a Chinese-connection.

In the last few weeks, Apple has blocked apps used to evade the country’s internet censors, it has announced the construction of a Guizhou data centre, and it has created a new position of MD for Greater China. Some of the moves are sensible and logical, however, it remains to be seen what the public backlash will be for aiding the government ambitions of censorship. What is clear is that Cook is doing everything he can to get back into the Chinese good books.

Another little snippet of speculation comes with the launch of the next iPhone. Over the quarter, the iBoss shipped just over 41 million units, slightly up year-on-year, though it would appear the next flagship model will be coming in September not October, as assumed by most. Apple says to expect $49 billion to $52 billion in the next quarter, more than many estimates, hinting that there will be a big launch at some point over the next three months.

A final area worth considering is the greater emphasis on services from Apple. The services business unit, which consists of products such as the Apple Store and iTunes, grew by a total of $1.29 billion year-on-year. We’re not saying that sales of the iPhone are going to crash at any point in the near future, but removing the overwhelming dependence the business has on the product line will ease pressure, and possibly keep investors a bit happier.

There might be a few smudges to clean off the records, but Apple is still one of the most powerful, influential and dominant technology companies on the planet. Its army of cult-like iSleepwalkers would walk off a cliff for the next flagship model, but this element of euphoria would have appeared to have been lost in the Chinese market.

Cook has had to might some adjustments and sacrifices for the Chinese government to recover previous glories. Should it work, it will be interesting how many other companies will ditch Western ideals in accommodating Chinese censorship ambitions. Gaining favour in such a market, along with the profits which accompany, could be a very convincing argument for eager-fingered CEOs.

It’s not the end of the world for Cook and his cronies when you consider the global penetration, but losing out on such a lucrative market is a nagging pain.


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