Apple Reports Record Sales Growth In China Despite Rising Costs

Apple Inc. reached new sales records in China in the September quarter, softening the blow of rising costs for components like memory and navigating soft consumer demand better than rivals.

The iPhone maker grew revenue in the greater China region 21% to a new high, driven primarily by its flagship smartphone series, Chief Executive Officer John Ternus said on a conference call on Monday. The company also delivered double-digit growth with its Mac division while its Services group set an all-time high in the country, though it came short of the average of analyst estimates.

The broader Chinese economy is struggling to spark growth and consumers have shown themselves wary about making larger discretionary purchases. Apple resisted increasing prices for its iPhone longer than domestic rivals like Huawei Technologies Co. and Xiaomi Corp., doing so only in September. Its presence as one of the premium options on the market helped the company avoid the worst of the margin erosion brought on by the surging cost of memory. Global mobile shipments suffered their worst decline on record in the September period, according to IDC, but a better product mix helped Apple.

"Taking a step back, greater China was up 28% for the full year," Ternus said on Monday, after the company delivered a mixed outlook to investors in its first quarterly report under his leadership. "Our installed base of active devices has reached an all-time high and we had a record year for iPhone upgraders in mainland China."

The outlook from Apple points to reduced profitability as it too has to digest greater component costs, though the company is seen also benefiting from the memory supply crunch as consumers gravitate toward fewer purchases of pricier devices. The company is projected to capture a 27% share of China's smartphone market in the December quarter by market researcher Smart Analytics Global, which sees robust demand for the iPhone 18 Pro series.
 

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