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Apple: pay attention to emerging markets, not falling China sales | TechCrunch

Apple: pay attention to emerging markets, not falling China sales | TechCrunch

Apple's Chief Financial Officer Luca Maestri challenged investors' concerns. China's revenue down 8 percentNoting that sales are increasing in other emerging markets.

“When we start looking at places like India, like Saudi, like Mexico, Turkey, Brazil… and Indonesia, the numbers are getting bigger, and we're very happy because these are the markets where our market share ( (currently) is low.” Mistry said during Apple's second-quarter earnings call on Thursday.

Revenue in China fell to $16.37 billion during the second quarter.

“The population is large and growing, and our products are really growing in these markets,” Maestri continued. “The level of excitement for the brand is high.”

Maestri said one thing is certain: the population in emerging markets is indeed large and growing. But according to available data, Apple's growth in these regions is not as rosy a picture as the executive tried to paint.

Net sales in the U.S. — which would include places like Brazil and Mexico — fell slightly year-over-year to $37.3 billion from $37.8 billion, according to the report. Apple's Q2 2024 Report. Sales in the “rest of Asia Pacific,” which would include emerging markets such as India and Vietnam, fell 17 percent to $6.7 billion in the second quarter of 2023 from $8.1 billion in the quarter ended March 31.

To play devil's advocate, Apple's declining sales in these regions may have more to do with pricing than hype for the product.

Maestri noted that Apple has introduced a number of financing solutions and trade-in programs that “lower the affordability threshold,” so consumers can buy into a higher product range.

“This is very valuable for us in developed markets, but especially in emerging markets where affordability issues are more pronounced,” Mistry said.

Still, pointing to the glimmers of hope that emerging markets may hold may not be enough to placate investors. China is Apple's third largest market, and it has become an arena of fierce competition with local companies such as Oppo and Xiaomi dominating the market. According to Counterpoint Research, Huawei has seen a massive swing in the country after being completely freed from US restrictions. The firm's phone sales rose nearly 70 percent from last year, while Apple's sales fell 19 percent. In September 2023, Beijing imposed sanctions. On iPhones for government officials in the workplace, echoes of the US crackdown on Huawei.

China and emerging markets aren't the only areas on Apple's balance sheet this quarter. The company also reported a 10 percent decline in iPhone sales across all markets. Apple's slow pace of AI compared to rivals like Google and Microsoft also likely contributed to lower iPhone sales.

Despite the unimpressive hardware numbers, Apple still managed to beat Wall Street expectations. It also called for a stock increase. More than 10% In after-hours trading, services were driven by both a rise in revenue and large stock buybacks of $110 billion — up from $90 billion in purchases last year.

Investors on the call tried to get some more details from Maestri and Apple CEO Tim Cook about its upcoming generative AI launches, which Apple has teased over the past few months, but executives would only reveal That announcements are imminent.

We'll keep an eye on Apple's Worldwide Developers Conference for more news.

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