Apple's Q3 2016 Revenue Drops 33% in Greater China as Europe Regains Position as Second Biggest Market - MacRumorsOpen MenuShow RoundupsShow Forums menuVisit ForumsOpen Sidebar
Skip to Content

Apple's Q3 2016 Revenue Drops 33% in Greater China as Europe Regains Position as Second Biggest Market

by

china-flagIn today's third quarter earnings report, Apple revealed a significant drop in revenue from Greater China, which is down 33 percent year over year. Revenue from China was at $8.9 billion in Q3 2016, down from $13 billion in Q3 2015.

During the followup earnings call, Apple CEO Tim Cook said the company continues to be encouraged about growth in the country despite the decline in revenue and remains "very optimistic about growth opportunities."

He said Apple's underlying business is stronger in China than the results imply, with the iPhone install base in the country up 34 percent year over year. Cook cited statistics from China Mobile, one of the largest carriers in the country, which says it sells more iPhones than any other smartphone.

According to Cook, channel inventory reduction and currency headwinds have impacted business in the region and presented some significant economic challenges. Despite this, Cook continues to feel "really good" about Apple's business in China, pointing towards the opening of the 41st retail store in Greater China and a recent $1 billion investment in Didi Chuxing.

With revenue in China down 33 percent, Europe has regained its position as Apple's second biggest market after the United States, bringing in $9.6 billion in revenue during the quarter.

Tag: China

Top Rated Comments

128 months ago
Maybe Tim will give a crap about everyone in Europe again now..
Score: 10 Votes (Like | Disagree)
Cole Slaw Avatar
128 months ago
Of course there is. Now more than ever. Why put all of you eggs on foreign soil where they will stomp on you without notice. Where they will steal your intellectual property without blinking. Where Foxconn and the rest of the suppliers are selling your iPhone parts to be counterfeited. Now is the best time. It's not about cheap labor anymore. The stakes are far far bigger.
There's truth there.
You don't really want to have all your high-tech industrial capacity located in another country, especially one that is becoming a military rival and potential future enemy.
Making everything in another country like China may be in the interests of corporations, but not necessarily in the greater national interest.
Score: 2 Votes (Like | Disagree)
rp2011 Avatar
128 months ago
Interestingly enough, Foxconn itself has automated 60,000 jobs this past year. Automation is a Chinese government policy to become more competitive.

http://www.theverge.com/2016/5/25/11772222/foxconn-automation-robots-apple-samsung-smartphones
http://uk.reuters.com/article/us-china-robots-forecast-idUKKCN102104

So, really, there's no need for Apple to build anything in America. And technically, it's not even Apple building these products, but Foxconn and other suppliers. Foxconn itself is diversifying its locations and manufacturing. Ideally, Foxconn would open a plant in the U.S. but I doubt it'll do it until it has its automation system down as there's no way it's going to pay U.S employees $15+/Hr to make computer components.

What Apple should do is some kind of joint venture with an online services company like Baidu or Tencent. China wants its domestic companies to benefit from Apple's growth, not loose to it. That's what I mean by placate, Tim needs to convince China that Chinese companies will benefit from Apple's success.

The ideal compromise, I think, is that Apple provides the technical infrastructure, while Baidu/Tencent/Alibaba provide the content (movies, games, TV Shows). Apple can work with U.S content partners as a middleman to bring more TV Shows/Music/Movies to China. Basically, Apple needs to be a middleman, something it desperately doesn't want to do. But, it will need to change its way of doing business to gain traction in China. China will outright block Apple services if it feels it'll damage domestic companies.
Of course there is. Now more than ever. Why put all of you eggs on foreign soil where they will stomp on you without notice. Where they will steal your intellectual property without blinking. Where Foxconn and the rest of the suppliers are selling your iPhone parts to be counterfeited. Now is the best time. It's not about cheap labor anymore. The stakes are far far bigger.
Score: 2 Votes (Like | Disagree)
128 months ago
China's middle class is still growing and the opportunities are still huge. But after bringing the technologies and know how to build these gadgets did we think we would forever loom over them and they not build stuff themselves and then not impliment nationalistic restrictions and tarifs like the kind Trump and others want to impliment on them?

If anyone is shocked it's because you were born yesterday.
It's not that, it's the price point for mass consumption. Just about everyone who has the money buys an iPhone. They're hugely popular. It's not uncommon to walk into a private school in China and see kids with Apple Watches, iPhones, and iPads. Everyone loves Apple.

The problem is you can get incredibly good phones for half the price from Xiaomi (Mi 5) and Huawei (P9). As the middle class grows, so will consumption of Apple Products. I would argue that a lot of the fall in U.S Revenue comes from really bad exchange rate recently. The biggest issue is the lack of Apple Services in China. Chinese buy iPhones than use domestic services from Baidu and Tencent. If China wants to make it big in China, they're going to have to get their services here. But...

China has said they don't want foreign technology companies to have a deep penetration into the Chinese market. Basically, Apple needs to work closely with the Chinese government and placate it if it wants to sell its services there.
Score: 2 Votes (Like | Disagree)
winston.x Avatar
128 months ago
Has Tim ever not been optimistic about something??
Score: 2 Votes (Like | Disagree)
rp2011 Avatar
128 months ago
China's middle class is still growing and the opportunities are still huge. But after bringing the technologies and know how to build these gadgets did we think we would forever loom over them and they not build stuff themselves and then not impliment nationalistic restrictions and tarifs like the kind Trump and others want to impliment on them?

If anyone is shocked it's because you were born yesterday.
Score: 2 Votes (Like | Disagree)

Popular Stories

iphone 17 pro dark blue 1

Apple Leads Top Brands for China Smartphone Growth as Market Declines

Friday April 17, 2026 8:03 am PDT by
China's smartphone shipments fell 4% year over year in the first quarter of 2026, according to data from Counterpoint Research, with Apple delivering the strongest growth among the top six brands. Counterpoint's Market Monitor Tracker attributed the decline primarily to a high base effect from last year's government subsidy program and rising component costs. Counterpoint noted that...
Foldable iPhone 2023 Feature 1

Apple Apparently Sees Camera Control as Key Foldable iPhone Feature

Monday April 20, 2026 7:40 am PDT by
Apple's first foldable iPhone will be eSIM only and feature a Camera Control despite its ultra-thin design, according to a known leaker. In a series of new posts, the leaker known as "Instant Digital" said that Apple has made deliberate engineering compromises to ensure that the first foldable iPhone features a Camera Control button, despite it being at least 1.1mm thinner than the iPhone...
Apple Event Logo

Apple Just Released a New Accessory

Monday May 4, 2026 8:13 am PDT by
Apple today released a new Pride Edition Sport Loop for the Apple Watch. The band features a rainbow design with 11 colors of woven nylon yarns. The new Pride Edition Sport Loop is available to order now on Apple.com and in the Apple Store app in 40mm, 42mm, and 46mm sizes, and it will be available at Apple Store locations starting later this week. In the U.S., the band costs $49. There...
Related Apple News: Iphone | Health | Entertainment | Mac | Lifestyle