Apple reported a deepening slump in China during the holiday quarter, even as total iPhone sales were stronger than expected and the company returned to revenue growth.
Sales in China dropped 13 per cent to $20.8 billion in the fiscal first quarter, which ended December 30, the company said on Thursday. That fell far short of the $23.5 billion predicted by analysts and was Apple’s weakest December quarter in the Asian nation since the first period of 2020.
“We are not happy with the decline, but we know China is the most competitive market in the world,” Chief Financial Officer Luca Maestri said in an interview with Bloomberg. The shares dropped more than 3 per cent in extended trading after the report was released. They had closed at $186.86 in New York on Thursday, down 2.9 per cent this year.
Maestri also warned that Apple’s sales growth may not last. The current quarter will have a tough comparison with the year-earlier period, when pent-up demand for the iPhone added close to $5 billion to sales, he said. At the time, Apple was recovering from supply-chain constraints triggered by Covid lockdowns. Apple is contending with cooling consumer spending in China, rising competition and widening government bans of foreign technology.
Huawei Technologies introduced a new line of smartphones last year powered by China-made chips after a US blacklisting had largely driven it out of the market. Huawei’s return sparked a wave of nationalistic buying in the country, with a 36 per cent jump in shipments in the fourth quarter, according to IDC.
First Published: Feb 03 2024 | 12:09 AM IST
