[Apple's earnings report is released: the decline of the Chinese market has become the biggest worry].
Apple's latest earnings report was released, with total revenue of 1195$800 million, net profit of 339$200 million, gross margin of 459%。Despite the better-than-expected results, a 13% decline in revenue in China was the main reason for market capitalization**. Apple's revenue in China was $20.8 billion, well below market expectations and the weakest quarter in Asia since 2019.
Apple's chief financial officer, Luca Mestri, admitted that he was unhappy with the decline in revenue, while warning that Apple's sales growth may not be sustainable. Although the global mobile phone market share of iPhone will increase to 20 in 20231%, with fourth-quarter revenue of $69.7 billion, but facing fierce competition in the Chinese market, the iPhone did not perform as expected in China. The return of Huawei phones has hit Apple with increased competition, with the iPhone growing by only 6% in the Chinese market, while Huawei and Xiaomi grew by 47% and 12%, respectively, according to Canalys data.
In addition to the iPhone, Apple's other businesses are also not doing as well as they should. Services revenue was $23.1 billion, up 11% but below expectations. iPad sales were weak, with revenue of 70US$200 million, down 25% year-on-year; MAC business was basically flat; Other hardware revenues were 119US$500 million, down 11% year-on-year. The launch of the new VISION Pro may bring new opportunities for Apple, but its ** and bulkiness may limit consumer acceptance.
In analyst Ming-Chi Kuo's view, the iPhone may face "structural challenges" in 2024, and shipments will decline significantly. Apple has lowered its 2024 iPhone shipment estimate to 200 million units, down 15% year-on-year, and may be the biggest decline among the world's major mobile phone brands. Kuo pointed out that the new high-end mobile phone design trend is generative AI and folding screens, and China's high-end mobile phone users are gradually making folding screens their first choice, while the "return of Huawei" has also intensified market competition.
Despite the challenges facing the Chinese market, Apple executives remain confident that there are significant opportunities in China in the long term. Luca Mestri said that while the current quarter will be tough, Apple believes that China is still an important growth engine. Apple CEO Tim Cook revealed that this year will be related to the release of artificial intelligence functions, looking forward to the future expansion of the Chinese market.
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