The Ups and Downs of Apple's China Business

Having gone from growth driver to problem child and back again before, Apple’s China business was one of the weaker spots in the company's better-than-expected holiday quarter. According to its latest earnings report, Apple's sales in the Greater China region, which includes mainland China, Taiwan and Hong Kong, declined 11 percent year-over-year in the last three months of 2024, meaning that sales in the region have now decline in 7 of the past 8 quarters on a year-over-year basis.

When asked about his company's performance and prospects in China, Apple CEO Tim Cook said results had been better in markets where Apple Intelligence was already available to users, which is not the case in China, a market that Cook described as the most competitive in the world. Looking ahead, Cook pointed towards a fiscal stimulus package announced in China could boost sales for some of Apple's devices in the country.

And while Apple lost the number 1 spot in the Chinese smartphone market for the full year 2024, it was the best-selling smartphone brand in China in Q4 2024, according to IDC estimates. Total smartphone shipments in China increased 5.6 percent to 286.2 million units last year - marking a recovery after two years of sales declines that also weighed on Apple's business.

As our chart illustrates, Apple's sales in Greater China have followed a cyclical pattern over the past decade, during which boom times have been followed by periods of lackluster growth.