Apple reported record profits in the final quarter of last year, and CEO Tim Cook pointed to growth in iPhone sales in China as a key reason.
That was a dramatic turnaround after 18 months of declining sales in the country, and analysts say there are three reasons…
Best iPhone sales ever in China
Cook said Apple has seen success across the board in China, including existing iPhone owners upgrading to newer models and people switching from Android.
Greater China grew by 38% year-on-year. It was driven by iPhone, where we set a record for sales, making it the best iPhone quarter ever in Greater China (…) Traffic in our China stores grew by strong double digits year-over-year. It was a great neighborhood. Our installed base reached an all-time high in both Greater China and Mainland China. And we set an all-time record for upgrades and saw strong double-digit growth in switches.
And according to a Worldpanel survey, iPhones were the top 3 smartphones in urban China during the quarter.
Apple has previously seen an 18-month decline in iPhone sales in Greater China due to the increasing sophistication of models launched by local brands.
Three reasons for success
Analysts quoted Wired they say there are three reasons for this turnaround.
First, the entry-level iPhone 17 offers a huge amount of phone for the money. That’s why we crowned this model — not the exciting iPhone Air or the more sophisticated iPhone 17 Pro — Apple’s Product of the Year.
The iPhone 17 achieved something that the “base” model of the summer couldn’t. It’s an all-around great iPhone with zero major compromises (…) It’s the first non-Pro iPhone to offer an Always-On display with ProMotion. It also has the same 18MP center-stage selfie camera as the iPhone 17 Pro, plus an improved 48MP ultra-wide lens on the back (…) For the first time, the base iPhone compares very well to the Pro model. All you really get is a little longer battery life, a little more power, and a third camera.
Counterpoint analyst Gerrit Schneemann said it was a huge change from the previous year’s launch.
The entry-level iPhone 17 is a much bigger step up from the iPhone 16 than usual, including features traditionally only associated with the Pro line. This may have motivated more people to upgrade earlier than usual when new phones are launched, Schneemann says.
Second, Apple managed to hit a price point low enough to qualify for a government subsidy — the model was priced just 7 cents under the cap.
To help stimulate the economy, Beijing will spend around $43 billion in 2025 to subsidize domestic purchases of electronics, appliances and cars. Smartphones sold for less than RMB 6,000 (about US$860) were eligible for a discount of up to 15 percent. Apple launched the iPhone 17 in China at RMB 5,999, ensuring that price-sensitive buyers could benefit from the government’s policy.
Thirdly, a very attractive new model landed at the right time. Many iPhone owners in China upgrade every three to four years, and Apple’s last peak sales period came with the launch of the iPhone 13.
Photo by appshunter.io on Unsplash
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