APPLE EXPERIENCES ROBUST GROWTH IN CHINA

AsiaInfo Services
01-20-2011
Apple Experiences Robust Growth in China

BEIJING, Jan 20, 2011 (SinoCast Daily Business Beat via COMTEX) -- An employee of a Chinese Internet company reveals that the company awards its employees with products of Apple Inc. (Nasdaq: AAPL) at the end of each year.

The enthusiasm of Chinese fans about the products of Apple boosts the company's operating revenues, especially, in Greater China Region, where Apple's latest quarterly proceeds approach that of last fiscal year.

Apple COO Tim Cook yesterday disclosed at the conference call for the first quarter of the 2011 fiscal year that the company's Greater China Region recorded operating revenues of USD 2.6 billion in the period, swelling 400% from a year earlier. The figure only reached USD 3 billion in last fiscal year.

Apple CFO Peter Oppenheimer unveils that the company's four retail chains in China have the highest passenger flows and operating revenues around the world.

The fiscal report released by Apple yesterday shows that the company obtained net profits of USD 6 billion, rising 78% and making a record high. In the quarter, Apple sold 16.24 million iPhone and 7.33 million iPad.

Apple has been keeping a gross margin of about 40%, thanks to the company's complete supply chain covering LCD panel maker LG, assembly service provider Foxconn Technology Group and EMS memory manufacturer Samsung.

Moreover, Apple has wide sales network for iPhone and iPad, which is more influential than other PC producers, including online shop and retail chains of Apple Store as well as sales outlets of China Unicom (Hong Kong) Ltd. (NYSE: CHU, SEHK: 0762, and SHSE: 600050), Suning Appliance Co., Ltd. (SZSE: 002024) and Best Buy Co., Inc. (NYSE: BBY).

The headquarters of Apple plans to boost the number of its Apple Store retail chains in China to 25 within two years, because of the sales boom in the country. Actually, the Chinese market still has great potential.

For example, smuggled products of Apple from the US and Hong Kong are rampant there, China Telecom Corporation Ltd. (NYSE: CHA and SEHK: 0728) is eager to sell iPhone 4 compatible with the CDMA technology. This year, Apple will launch iPad 2 and iPhone 5, let alone the 3G iPad will soon hit the Chinese market.

However, a researcher of China Merchants Securities Co., Ltd. (SHSE: 600999) points out that only 20% to 30% of the profits from iPhone are shared by partners of Apple. Their profit margins are far less than that of Apple.

Certainly, many companies have benefited from the cooperation with Apple. TPK Holding Co., Ltd., the supplier of touch screens for iPhone and iPad, witnessed hovering stock price after listing and will enlarge its production capacity in Mainland China this year.

CSG Holding Co., Ltd. (SZSE: 000012) and Shenzhen Laibao Hi-Tech Co., Ltd. (SZSE: 002106), supplying touch screen glass for Apple, have gotten more orders, which boost their production expansion and help them win the favor of investors on the capital market.

(USD 1 = CNY 6.59)

Source: www.yicai.com (January 20, 2011)

KEYWORD: BEIJING INDUSTRY KEYWORD: Computers & Electronics SUBJECT CODE: Electronics
Electronic Consumer Goods
SinoCast China Business Daily news
SinoCast China IT Watch
Greater China
operating revenue
iPhone
iPad
Apple Store
CDMA
3G

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