Apple showed soft year-over-year revenue growth for China in Q1, and it’s clear the party may be slowing down in the region. During Q1, Apple saw 14 percent year-over-year revenue growth in the Greater China region, which accounts for the company’s sales in China, Taiwan and Hong Kong.
In this first fiscal quarter of 2016, Apple’s revenue in China grew to $18.37 billion from $16.14 billion in 2014. Following the trend of 2015, Apple’s revenue in China again outpaced that of Europe at $17.93 billion but at thinner margins than past quarters. In the earnings call, Apple CEO Tim Cook noted “economic softness” was beginning to grow evident in the region.
The Greater China region still remains Apple’s second-largest market after the Americas, making up just under a quarter of Apple’s total revenues. The sales struggle in Japan continues with Apple posting $4.79 billion, a 12% YoY drop in the region.
Sales of the iPhone in China has been a pretty significant thought on a lot of investors’ minds as there’s been a pronounced slowdown in growth in the number of smartphones being shipped in the country. The latest IDC numbers estimated that 2016 would only see 1.2 percent year-over-year growth for smartphone shipments in the region.
Fluctuating global currencies left Apple to add a special addendum to this quarter’s earnings report, highlighting the global decline in non-U.S. dollar currencies. In a “currency index” in the release, Apple specified that $100 in Q4’14 non-U.S. dollars was worth only $85 today.