By all accounts, Apple’s Q3 earnings report was spectacular, with the company bringing in a monumental $28.57 billion in revenue. When you break down that revenue into region — Americas revenue: $10.13 billion, Europe: $7.1 billion, Japan: $1.51 billion and Asia-Pacific (mainland China, Hong Kong, and Taiwan): $6.33 billion — you realize why Apple (NASDAQ:AAPL) speaks of its international expansion so reverently, especially the Asia-Pacific region in which revenue growth is up 6x year over year.
“China was very key to our results” Apple COO Tim Cook during Tuesday’s earnings call, announcing that the country accounted for $3.8 billion in revenue this quarter and $8.8 billion cumulatively in the first three quarters of this year. Cook said that while the company hadn’t “learned to play perfectly” in the market he didn’t think anyone would have believed that the world’s most populous country would comprise such a large percentage of total revenue a year ago. Apple stores in China are the fastest growing and have the highest numbers on average in terms of both traffic and revenue.
According to Cook, iPhone sales volume is growing at 5x for first 3 quarters of the fiscal year and the iPhone was “the key driver” of that cumulative $8.8 billion in revenue number. “We feel very good about our progress,” Cook said. “We feel very very good about it, we’re taking those learnings and applying it to other markets as well.” Apple added 42 new carriers in 15 new countries in the quarter and is serving over 100 countries now.
Right now the only Chinese carrier offering the iPhone is China Unicom (NYSE:CHU). According to Cook, iPhone sales in China are up 5x year over year for the first three quarters and a “key driver” of that $8.8 billion in revenue. China Mobile President Wang JianZ hou recently said that it had 5.6 million iPhones on his network, alluding that a good percentage of those iPhone sales in China end up as pre-paid or unlocked phones. The WSJ reports that Apple may be in talks with China Mobile to expand the iPhone to its 600 million customers.
Apple products are considered status symbols in China, like the Dolce and Gabbana or Louis Vuiton of computers. And priced as such (at 5,999 yuan the iPhone 4 is about 1/4 the average yearly household income. ”It’s up to us to convince people to spend a little more for a materially better product,” Cook said. Looks like they’re doing a great job.