Apple beats expectations, but drops in China

India saw an all-time revenue record and is poised for four more physical stores

Apple released its fourth quarter results for FY 2024 on Thursday, revealing that its sales in China were starting to slide and hinting at market saturation in the face of competition from domestic players like Huawei and Xiaomi.

China has long been an important market for Apple – or as CEO Tim Cook put it in this week's earnings call, "a headwind that we've been reporting for a period of time."

But figures of net sales [PDF] hinted that the market may be saturated.

Greater China showed sales slowing down both year-on-year and quarter-on-quarter – albeit more dramatically for the former as sales moved from $72.5 billion in FY23 to $66.9 billion in FY24. That was a decrease of around 7.7 percent year-on-year.

Quarter-on-quarter was a decline, but relatively flat, with Q4 bringing in only $51 million less than Q3. Doesn't sound like much, but $50 million here and $50 million there starts to add up to real money.

"If you look at how we did for the quarter, we were relatively flat year over year. And a key component of that improvement relative to the year-over-year performance that we had been achieving is that there was a sequential improvement in foreign exchange, and so that helped us out," explained Cook.

He described Apple's installed base of active devices as having reached an all-time high.

"We had the top two selling smartphones in urban China according to Kantar," the CEO added. He claimed that mostly new customers were purchasing Mac, iPad and the Apple watch in China.

While that may be true of "urban" China – where salaries are generally higher and premium products can be afforded – mainland China overall has seen domestic players like Huawei and Xiaomi pushing the iPhone out of top spots this year.

Sales are not the only Apple activity slowing in China. The fruit cart has been moving much of its manufacturing out of China as well – choosing places like India as a major location for building its products.

India has shown big promise when it comes to sales as well. The iPhone maker opened two new retail stores there this quarter and has four more planned. For comparison, it currently lists 47 stores in mainland China.

While still behind in the number of stores, Cook revealed that India saw an all-time revenue record this earnings period.

"We continue to be excited by the enthusiasm we're seeing in India," he gushed.

The big picture

Apple overall posted quarterly revenue of $94.9 billion – up 6 percent year on year. Seventy billion dollars was thanks to its products, which grew 4 percent year on year.

iPhone revenue was the biggest chunk of overall revenue, drawing in $46.2 billion, up 6 percent year over year. The biz only released the latest iPhone 16 a few weeks ago.

Mac revenue grew 2 percent year-on-year to 7.7 billion, and iPad revenue grew 8 percent year-on-year to $7 billion. Wearables, home and accessories revenue meanwhile declined 3 percent to $9 billion – despite the recent launch of the Apple Watch Series 10.

While those products provided a small amount of growth, the services segment surged to an all-time record of $25 billion in net sales – representing a 12 percent increase year-over-year.

The services figure does exclude a one-time cost of $10.2 billion related to a long-running case in Ireland, regarding how the most valuable company in the world managed its taxes. ®