Tim Cook Addresses Discrepancy in iPhone Sales Growth in China

Apple’s CEO Tim Cook recently addressed investors, asserting that iPhone sales in China experienced growth during the first quarter of the year. This statement contradicted previous external research that suggested a decline in sales within this crucial market for the tech giant.

During Apple’s earnings call on Friday, Cook emphasized, “We still saw growth on iPhone in some markets, including mainland China.” He pointed out that China is a significant region, accounting for 18% of Apple’s overall sales. Despite this positive outlook, the company’s revenue for Greater China, including Hong Kong and Taiwan, declined by 8% in the quarter year-over-year, amounting to $16.4 billion.

Cook referred to data from Kantar, noting that the iPhone 15 and iPhone 15 Pro Max were the top-selling smartphones in urban China during the quarter. Independent analysts, however, have reported a different narrative, indicating a decline in overall iPhone sales in China.

For instance, Counterpoint Research observed a 19% year-on-year decline in iPhone sales for the quarter ending on March 31, while the International Data Corporation (IDC) found a nearly 10% drop in iPhone shipments for the region during the same period.

The discrepancy in data interpretation arises from how Apple and external analysts calculate revenue. IDC analyst Will Wong explained to Bloomberg that their data tracks the year-on-year decline in the total value generated by iPhones in China, considering the prices customers actually pay. Apple, on the other hand, likely uses a different pricing level, such as factory prices, in its financial reports, which could lead to differing revenue calculations.

Another factor contributing to this difference could be the increasing share of newer and more expensive iPhone models in purchases, which may drive up revenue despite a decrease in total unit sales.

Analysts, during the earnings call, raised questions about the disparity between Apple’s data and third-party reports, but Cook declined to comment on these external data points.

Cook, who remains optimistic about China’s long-term prospects, acknowledged uncertainties in short-term performance. “I maintain a great view of China in the long-term,” he remarked, emphasizing the country’s importance as a manufacturing hub and a significant customer base for Apple.

The conflicting reports highlight the complexity of assessing market performance, where different methodologies and factors can lead to varying conclusions about a company’s sales and revenue trends.