Apple has a big market opportunity in China

On May 5, according to foreign media reports, Apple’s revenue in the Greater China region reached US$10 billion (approximately RMB61.58 billion) in the second fiscal quarter, a record high. For investors seeking to find ways for Apple's continued growth, Apple’s advantage in Greater China is an excellent signal. The following is the reason why Apple's revenue in Greater China will rise again.

The Chinese market is Apple's biggest opportunity?

maybe. Tim Cook, Apple’s chief executive, said on the company's second-quarter financial analysts conference call that in the first half of 2013, revenue in Greater China grew by 21%, which is the highest growth rate in the region. Nearly 10 billion US dollars of revenue accounted for 21% of Apple's total revenue.

Apple plans to open up this potential market. Cook explained that “we decided to continue to increase our investment in Greater China. In the next two years, we will double the number of stores in the region. We will continue to expand our network business and continue to build channels.”

Cooke said that one of the key factors for China's business growth is the iPhone sales agreement with China Mobile. This advantage will continue in the future: China Mobile’s launch of 4G network is still just the beginning.

The status of Apple's China business does not depend entirely on its cooperation with China Mobile. According to data from market research firm IDC, sales of iPhones and iPads in Greater China in the second quarter were higher than the average growth rate of smart phone and tablet PCs in the region. Cooke said in the second fiscal quarter financial analysts conference call that the second quarter of Greater China iTunes software and services revenue increased by 3 digits.

Apple’s launch of the iPhone this year -- which may have 4.7 and 5.5 inches in two sizes -- also helps Apple continue to explore the Greater China market. In the Chinese market, the sales of large-screen mobile phones are very good. According to Kantar WorldPanel ComTech, a market research company, in March, 40% of the smartphones sold in China exceeded 5 inches.

Apple will be rewarded Although many manufacturers are competing for the Chinese smart phone market, there is no doubt that Apple ranks among the biggest beneficiaries. Apple dominates the high-end smartphone market in China. According to China’s developer service platform, Youmen said that in China, 27% of smartphones are priced at US$500 (about RMB3,079) and above, of which 80% are iPhones. Of course, high-end smart phones also have the highest profits.

If you do not believe that Apple's opportunities in the Chinese market, consider the following data: In the fourth quarter of 2013, the number of smart phone users in China increased from 380 million in the first quarter to 700 million. With the cooperation with China Mobile, the expanding 4G network and the larger iPhone, Apple has the conditions to open up the Chinese market.