Political winds loom large over Apple’s business in the country controlled by the Chinese Communist Party whether its CEO Tim Cook wants to acknowledge it or not.
Dave Lee for Bloomberg Opinion:
the iPhone — the main driver of Apple’s revenue — was doing just fine. “In the September quarter, we set an iPhone revenue record in China, and we’re very proud of that,” Cook said. “Over the long term, I view China as an incredibly important market, and I’m very optimistic about it.”
The positive spin did the trick, but it’s clear the company is heading into an uncertain period in regard to China, which accounts for around 19% of its overall revenue. Sentiment around the Cupertino giant and its products is becoming much harder to predict in the face of political volatility between the US and China, where tensions center squarely on the availability and manufacturing of cutting-edge technology.
This year and next might present a bigger challenge than previous ones based on what happens on a geopolitical level. We’re still in the early days of US efforts to get tough on China’s access to new technology. As I’ve written before, there is worry that political change might happen more quickly than the supply chain can handle. Efforts to diversify production away from China are happening, but only slowly…
It’s hard to get a read on what Apple is seeing in the current quarter. It warned, without going into geographical specifics, that year-on-year revenue growth would be flat in the October-December period, its fiscal first quarter.
MacDailyNews Take: We covered this over a year ago here: Tim Cook firmly latched Apple onto China’s CCP teat. What’s his plan for weaning it off? – November 2, 2022
And, btw:
Similar (“flat”) revenue in a 13-week quarter (2023) vs. a 14-week quarter (2022) equals growth.
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