Apple: No slowdown for iPhone in China

Apple CEO Tim Cook reassures analysts and investors that the iPhone is doing just fine in China.
Written by Rachel King, Contributor

Even if Apple delivered disappointing earnings results for its third quarter on Tuesday, there are still some positive highlights from the quarter.

Thus, the Cupertino, Calif.-based company attempted to do some damage control during the quarterly conference call today, highlighting strengths as much as possible.

Worldwide, Apple sold 26 million iPhones during the third quarter compared to 20.3 million in the previous June quarter, representing 28 percent year-over-year growth.

Acknowledging that economic climate in the Eurozone is also hampering Apple a bit (like it is for most other major tech companies right now), CEO Tim Cook particularly emphasized how well the iPhone is doing in the Asia-Pacific region.

Cook cited that Q3 revenue in the region was $5.7 billion, which is a 48 percent year-over-year increase. As for iPhone sales, Cook said they were up 100 percent year-over-year.

However, he did try to explain how "virtually all of the $2.2 billion sequential revenue decline was due to iPhone sales in greater China" -- and about half of that is attributable to changes in the channel inventory, not the underlying sell-through of the iPhone.

As a reminder, in the previous quarter in our fiscal Q2, we launched the iPhone 4S in China in January. We added China Telecom as a second carrier in March. And as we proceeded across the quarter, we increased the channel inventory to accommodate the sales and to reach our target inventory of four to six weeks. The remainder of the sequential revenue decline is mainly attributable to normal seasonality after the very successful iPhone 4S launch. We did not see an obvious impact in Q3 that we would associate with the economy in mainland China.,

Chief financial officer Peter Oppenheimer also admitted that the poor economy in Europe impacted Apple's results, adding that the Mac maker also saw some economic impacts from natural resource-based economies including Australia, Brazil and Canada.

He also suggested that rumors and speculation about a new iPhone model coming soon could have also "caused some pause in customers purchasing."

Editorial standards