China impacted Apple’s bottom line quite a lot this quarter — and not in a good way. But the company still plans to invest in the country, Apple CEO Tim Cook said right after the company announced its earnings for Q3 2016.
Let’s dive into the numbers. For this fiscal quarter, Greater China accounted for $8.85 billion in revenue, or a little bit more than 20 percent of the company’s overall revenue. Twenty percent is quite impressive — but remember when people were thinking that China was about to overtake the U.S. as Apple’s first market? Nobody is mentioning that anymore. China revenue is down 33 percent year-over-year, and 29 percent compared to the previous quarter. In other words, Greater China is one of the main reasons why the company’s revenue is declining.
During a conference call with investors, Cook blamed the current economic environment in China for the disappointing performance. But the company won’t change course. “We will continue to invest in China,” he said.
Cook also reported that, according to China Mobile, there are more iPhones in use in the country than any other smartphone. And yet, as always, investors don’t care about iPhones in use — they’d rather see some big sales numbers. But Apple CFO Luca Maestri also added that Apple expects to grow in Russia, Brazil and Canada in order to reassure investors.
In June, a Beijing court ordered Apple to stop selling the iPhone 6 and 6 Plus in the city, having ruled that the phone’s design is too similar to a Chinese brand. Apple said that the order is still pending review, and that the iPhone 6, iPhone 6 Plus, iPhone 6s, iPhone 6s Plus and iPhone SE are still all available for sale today in China.