Apple’s sales in China fell by less than 1 per cent in the last quarter, reflecting ongoing challenges for the US tech giant in one of its key markets. Despite efforts to strengthen ties with local officials and address rising competition, Apple’s position in China appears to be under strain, according to a report by South China Morning Post (SCMP).
Marginal sales drop in Greater China
Apple’s revenue in Greater China, including mainland China, Hong Kong, Macau, and Taiwan, decreased to $15.03 billion for the quarter ending in September, compared to $15.08 billion a year earlier. The company’s annual revenue in the region also dipped by 7.7 per cent, reaching $66.95 billion, according to its latest financial report. In contrast, Apple saw a 6.1 per cent rise in global sales, totalling $94.9 billion for the same period, the report said.
Performance decline across successive quarters
The third-quarter sales dip follows a 6.5 per cent revenue drop in Greater China during the previous quarter, where sales reached $14.7 billion. Apple attributed this slump largely to decreased demand for iPhones and iPads. The decline in the Chinese market underscores Apple's ongoing challenges as it competes with local smartphone makers and awaits regulatory approvals to expand its services, the report mentioned.
Delays in AI services
Apple’s expansion of its artificial intelligence (AI) capabilities in China remains pending approval from Chinese authorities. Meanwhile, domestic brands have capitalised on Apple’s delayed entry by releasing their own AI-integrated devices. Recently, Xiaomi and Honor, the latter being a Huawei offshoot, introduced new flagship models with built-in AI functionalities.
While Apple’s AI services were introduced on newer iPhones as part of the iOS 18.1 update, these features are yet to be available on devices purchased within mainland China. The company announced that a Chinese-language version of its AI service is scheduled to launch in April, though specific dates for availability remain unconfirmed.
Strategic meetings with Chinese officials
Facing regulatory and market challenges, Apple CEO Tim Cook visited China last month for discussions with government representatives. Cook, who also chairs the advisory board at Tsinghua University’s School of Economics and Management, met with Vice-Premier Ding Xuexiang on October 25, pledging to expand Apple’s investments in the country.
The advisory board, comprising high-profile US business leaders including Ray Dalio, Walmart CEO Doug McMillon, and Blackstone Group’s Stephen Schwarzman, is regarded as an influential channel for diplomatic and economic dialogue between the US and China.
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In a separate discussion with Minister of Commerce Wang Wentao, Cook emphasised China’s role as a crucial market and key supply chain partner for Apple. He also held talks with Minister Jin Zhuanglong of China’s Ministry of Industry and Information Technology to address concerns around cybersecurity, data protection, and cloud services.
Despite these obstacles, Apple saw a positive market shift last quarter with the September launch of its iPhone 16 series. According to data from the International Data Corporation, Apple reclaimed the second spot in the Chinese smartphone market in Q3CY25, after slipping out of the top five in the previous quarter.
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