2/2/2024: Apple's Revenue in China Fell 13%
Apple reports 2023 Q4 (FY2024 Q1) earnings after market close yesterday. Revenue was $119.58B vs. $117.91B expected. EPS was $2.18 vs. $2.1 expected. Services revenue was $23.12B vs. $23.35B expected. Gross margin was 45.9% vs. 45.3% expected. Greater China revenue was $20.82B vs. $23.5B expected. AAPL 0.00%↑ stock dipped slightly during today’s trading session.
The good news is that Apple is finally returning to revenue growth after four consecutive quarters of declining revenue. The bad news is China is doing really poorly. Greater China revenue fell 2.2% in FY2023 vs 9% growth in FY2022 and 70% growth in FY2021. For Q1 FYF024, the Greater China revenue fell 13%!!!! It’s unclear if this decline is due to China’s gloomy consumer sentiment or Apple products being less popular in China because of geopolitical tensions. But Apple CEO said:
I remain very optimistic about China over the long term, and I feel good about hitting a new install base number, a high water mark, and very good about the growth in upgraders year over year during the quarter.
Well, we will learn more about China’s situation in the upcoming quarters. But the multinational consumer companies that have a strong presence in China could get hit pretty hard if China’s economy continues to deteriorate.