Tuesday, April 28, 2015

China Iphone sales surpass US as Chinese consumer latest tech bling

The steady growth of China's aspirational middle class and the rush to own the latest technology bling is the running story behind Apple's strategy to dominate of the global smartphone market.

Today's quarterly profit result reveals that for the first time Apple sold more IPhones in China than the United States.

Gift buying during the Chinese New Year helped Iphone sales soar with China revenue up by 71 percent to US$16.8 billion as consumers rushed to buy the IPhone 6 and IPhone 6 plus.

Apple has now well and truly hitched itself to the seemingly unstoppable rise of the Chinese consumer as the world's second biggest economy is on the verge of esclipsing the United States where many consumers remain subdued almost seven years after the global financial crisis.

"Really and truly, everything you look at in China was extremely good," Apple chief executive Tim Cook told investors this morning  as he revealed global IPhone sales totalled 61.2 million in the quarter.

Mr Cook revealed that in expanding the China "ecosystem" Apple was  "many more cities than we were before" with 21 retail stores in greater China that will grow to 40 by the middle of next year.

Apple has also widened its online stores in China where revenue is up over three times year on year with coverage up from 319 cities to 365 cities by the end of this quarter.

The surging online sales have been helped by Apple adding UnionPay as an option for Chinese customers given its status as the nation's most popular payment card.

"We're investing a lot in our infrastructure, in our products, on partnering with different companies. Chinese developers are coming on in significant numbers," Mr Cook said.

"We've now made payments to developers in greater China of over US$5 billion, half of which was in the last twelve months."

Even for Tim Cook, the consumer expansion in China is moving at a staggering pace.

"I've never seen as many people coming into the middle class as they are in China and that's the where the bulk of our sales are going," Mr Cook said.

"And so we're really proud of the results there and will continue to invest in the country."

The outlook for Apple's growth in China comes as its economy continues to slow to albeit stellar seven percent.

And as the managed slowdown continues, domestic consumption is expected to rise as Chinese consumers continue to see technology bling like the IPhone as their birthright rather than looking to the West for trends to set the pace of their lives.

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