Apple is one of the most valuable companies in the world, and much of that can be seen when they report their financial results. In their latest financial report, Apple boasted of leading revenues and a further increase in its services division. From Cupertino they are confident that sales of the iPhone 16 will be even higher than those of the iPhone 15, and they have made this known to their manufacturing lines, hiring more staff to meet the expected demand. However, There is a region in the world that resists it. Yes, we are talking about China.
For Tim Cook, China is “the most competitive market in the world”
And indeed, that is the case. China has a strong presence of own brands which already have their entire path open by being national. We are talking about Xiaomi or Huawei, brands that are developed by and for users in China and that later adapt to the global market. The same thing happens with Apple and the iPhone, but the other way around. They are products that are launched worldwide, with the United States as the main market, and then adapt to Chinese territory.
This year we have seen how Apple has used different strategies to reverse the trend. For example, During the Chinese New Year they offered discounts never seen before in the country. And yes, it seems that they worked. Now, as the iPhone 16 approaches, investors are wondering how Chinese users will receive the new iPhone models.
A new iPhone 16, but without Apple Intelligence for China
Apple is confident that the New iPhone 16 sets sales recordslargely due to its full compatibility with Apple Intelligence. However, the Asian country’s regulations prevent Apple Intelligence from working there, as does its partnership with OpenAI. Tim Cook has already confirmed that they were looking for allies for the country. However, this is expected to bear fruit by 2025“losing” almost half a year at best to impact China with the iPhone 16 and Apple Intelligence.
Still, interest in the iPhone among Chinese users is on the rise, as government data on foreign phones indicates that Shipments increased by more than 40% in May and 10% in June. A very clear sign that sales are growing again, something that should be increased after the launch of a new iPhone and the repositioning of prices of previous models such as the iPhone 14 or iPhone 15.
Apple’s margins are much higher than those of the competition
The number of iPhones sold in China may be lower, despite the upward trend in recent months. However, Apple’s margins in China exceed 40%while for example Xiaomi’s are 4%. That is why, although iPhone sales are lower compared to other brands, profits are usually higher. So much so that Apple’s revenue in China accounted for almost a fifthwith $380 billion in sales.
Furthermore, if we look at the bigger picture, Apple is one of the few American companies that can operate with some normality in China. Others, such as Google can’t even provide its servicesand something similar is happening with chip manufacturers like Intel. That is why China is increasingly trying to develop its own operating systems and independent chip manufacturing.
Apple being one of the few companies that They control the entire manufacturing process themselvesWith hardware, software and services, passing Chinese controls is a bit easier for them, even offering iCloud or Apple Music as normal.