Apple Inc revenue down sharply in China
25 Jul 2013
Apple Inc's China revenue fell sharply in the April-June quarter highlighing the challenges the iPhone maker faced in its second-largest market as the technology gap with cheaper local rivals narrowed and as Samsung Electronics came out with a steady stream of new models across all price ranges.
Even as investors marked up Apple shares with the sales of iPhones increasing more than expected, analysts said, the stock rally might prove short-lived with demand for its products dropping in China, BBC reported.
According to analysts Apple would lose market share in the world's leading smartphone sector.
Referring to rival Chinese models Huang Leping, an analyst at Nomura in Hong Kong told the broadcaster that there was some cannibalisation of Apple's market share from competitive mid-tier models that cost a lot less and performed as well, from vendors such as Xiaomi and Vivo.
The first quarter of this year saw Apple ranked top in Hong Kong with 46 per cent market share in smartphones, which though was down from 54 per cent in the last quarter of 2012, according to market research firm Canalys.
Apple notched sales of 31.2 million iPhones in its fiscal third quarter, even without releasing a new product, which came in at a fifth more than projections of analysts.
Meanwhile, shares of the company were up nearly 5 per cent in after-hours trading following its report of better-than-expected profits for the third quarter.
The company made $6.9 billion profit in the three months to June, thanks partly to robust sales of its iPhone smartphone.
According to Apple, it sold 31.2 million iPhones, a record for the June quarter, as against 26 million last year.
Profit, however was down 22 per cent from the same period a year earlier as its profit margins fell to 36.98 per cent from 42.8 per cent.
Average sale prices though were lower at $581, as against $608 a year ago.
Its revenue was also better than expected, with the company earning $35.3 billion, although it was marginally above the $35 billion of a year ago.
According to analysts, the data especially on iPhone sales would go to help allay some fears of a slowdown in Apple growth rate.
Apple's growth had taken a hit due to the growing popularity of rivals such as Samsung - which had now become the world's biggest mobile phone maker – as also the launch of a low-cost smartphones by Chinese manufacturers.
