Apple Inc. (NASDAQ:AAPL) CEO Tim Cook has described China as "the most competitive market in the world" following the company's underwhelming quarterly results, which were attributed to a drop in demand in China and fierce competition from Huawei Technologies.
What Happened: During the earnings call on Thursday, Cook acknowledged the challenges faced by Apple in China, which led to a decrease in revenue to $90.75 billion for the quarter ending March 30, according to the data from Benzinga Pro.
The decline was primarily driven by a 10.5% drop in iPhone sales, which generated $46 billion. Despite the overall decline, Cook highlighted some positive signs, stating that iPhone sales in Mainland China had actually grown.
He also highlighted the importance of the Chinese market, saying, "I maintain a great view of China in the long-term."
"We still saw growth on iPhone in some markets, including Mainland China, and according to Kantar during the quarter, the two best-selling smartphones in Urban China were the iPhone 15 and iPhone 15 Pro Max."
Cook also spoke about why he remains confident about China. "If you look at the top-selling smartphones, the top 2 in Urban China are iPhones," he said, adding, "And while I was there, it was a great visit and we opened a new store in Shanghai and the reception was very warm and highly energetic."
"And so I maintain a great view of China in the long-term. I don't know how each and every quarter goes and each and every week. But over the long haul, I have a very positive viewpoint," Cook stated.
When asked about whether the market in China is more macro or competitive driven, the Apple CEO said, "I think it has been and is through last quarter, the most competitive market in the world. And I — so I, you know, wouldn't say anything other than that."
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Why It Matters: Apple's recent performance in China has been a topic of interest. The company has been facing challenges in the region, with a significant decline in iPhone shipments and a struggle to maintain sales amid rising competition.
Despite these challenges, Apple has been deepening its involvement with China and expanding its production in Southeast Asia and India, indicating a commitment to the region.
Apple's recent Q2 earnings beat muted forecasts, with the company announcing a $110 billion stock buyback program and a one-penny-per-share increase in its quarterly dividend. The underperforming big tech stock saw a 3.5% rise following the earnings announcement.
Photo courtesy: Apple
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.