Apple is finally growing again in China

Image: Reuters/Thomas Peter
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Apple reported stellar earnings for the quarter ending Sept. 30, beating analyst estimates and sending its valuation to over $900 billion. In addition to strong revenue and profit overall, the company delivered additional positive news: It’s finally growing again in China.

Sales from greater China (which includes Taiwan and Hong Kong) reached $9.8 billion for the quarter, marking an 11.5% increase from the same period a year ago. For the first time in six quarters, revenue from the region is increasing.

In Apple’s earnings call, CEO Tim Cook attributed the turnaround in China to strong sales for all Apple products, adding that the company scored an “all-time record” for Mac sales in the mainland. “The China rebound was broad based across the products. And so we just had a phenomenal quarter on iPad, on the Mac, on Services, on Apple Watch, on iPhone,” he said.

Still, while the $9.8 billion in revenue marks an improvement from the prior quarter, it’s below the company’s 2015 heyday in China, spurred by enthusiasm for the iPhone 6 series.

The quarter includes sales of the iPhone 8 and iPhone 8 Plus, which hit stores in China in mid-September. At least some of the growth was due to reception for those new devices—research firm Canalys notes that the series’ proportion of total iPhone sales for the quarter exceeded the proportion the iPhone 7 took up last year.

Analysts are split as to whether the growth in China will continue. Canalys states that due in part to supply constraints, the iPhone X “will enjoy a healthy grey market status, but its popularity is unlikely to help Apple in the short term.” Counterpoint Research’s Neil Shah, however, believes that the high price of the iPhone X could cause revenue to reach iPhone 6-level heights, even if unit sales remain comparatively lower.