Apple is now the most profitable company in China, thanks to a combination of US sanctions against Huawei, and CEO Tim Cook’s corporate diplomacy with the government, according to a report from the Financial Times (a subscription is required to read the entire article).
For example, China’s smartphone sales in quarter three (Q3) 2022 declined 12.4% year-over-year (YoY) on weak demand. However, Apple took the crown in September in terms of market share growth, with its new iPhone series being launched a week earlier than usual, according to a new report from Counterpoint Research.
This also helped Apple reach its highest ever share of Q3 sales since 2016, tipping 15%. Counterpoint says that Android brands’ inventory eased following sales campaigns in the summer. The YoY decline should further narrow in quarter four with new smartphone launches, adds the research group.
What’s more, iPhone 14 series are so popular in China that a deluge of pre-orders crashed the tech giant’s online services and pushed shipments out five to seven weeks beyond the September 16 launch date for the Pro and Pro Max, the two most premium models, reports The South China Morning Post.
Twenty-four hours after pre-orders for the new smartphones opened, Chinese consumers had placed more than 2 million orders for iPhone 14 devices through the official Apple Store on JD.com, continuing the strong demand that JD saw last year for pre-orders of the iPhone 13, the article adds.
Also, Apple’s iPad now has 23.8% of the tablet market in China based on sales of 1.4 million in quarter two of 2022. That compares to 30.7% and sales of 1.7 million in the second quarter of 2021.
As noted by the Financial Times, Apple has managed to (so far) escape most of China’s recent, tough restrictions on tech companies. This seems to be due to corporate diplomacy by Cook, and a symbiotic relationship between Apple and the Chinese regime.
From the article: Cook, whose regular visits to Beijing in pre-pandemic times, including meetings with Xi along with other tech executives, have helped avoid the fate of other Western tech companies.
… It is clear to Beijing that this is a two-way street. They get a great return – a lot of it employment, and prestige,” said Brian Merchant, author of The One Device: The Secret History of the iPhone, “Salaries, standards are better for companies that contract with Apple. This has helped raise salaries for the middle class.”