Apple: China is an 'extremely exciting' market for us

In China, the world's largest single-nation smartphone market, the iPhone remains in a distant seventh place, behind its Android-powered rivals. Apple thinks it can do better.

Declan McCullagh Former Senior Writer
Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.
Declan McCullagh
2 min read
One of Apple's retail stores in China.
One of Apple's retail stores in China. Apple

Apple CEO Tim Cook said today that there's plenty of room for the Cupertino, Calif.-based company to grow in China.

"We continue to see it as an extremely exciting market," Cook said during a conference call with analysts held after Apple disclosed its most recent earnings.

Cook said that Apple's revenue in China over the last few months was $5.7 billion, the bulk of its overall Asia-Pacific revenue of $7.5 billion. Apple's total China revenue for the entire fiscal year ending last month was $23.8 billion, he said, now making up more than 15 percent of the company's total sales.

While the iPad has been popular in China, the iPhone is hardly a market leader in the world's most populous country, which now accounts for approximately 27 percent of global smartphone sales. The United States, by contrast, represents only 16 percent.

A report by analysis firm IHS in August said the iPhone is only No. 7 in China, behind typically less expensive devices from Lenovo, Coolpad, Huawei, Nokia, and ZTE. Samsung has a sizable 20.8 percent market share, and Android powers a commanding 81 percent of China's smartphones.

Even worse for Apple, the iPhone's market share -- though this was before the iPhone 5 was announced -- has slipped by almost half, to 10 percent, as of August.

Cook predicted the iPhone 5 will ship to Chinese customers in December. "I feel great about where we are on the manufacturing ramp," he said. "The supply output is significantly higher than October."

The iPhone has been available for purchase in China since late 2009.

In March, Apple confirmed that Cook was visiting China to meet with government officials, and he was spotted in the Joy City Apple Store in Beijing. Last week, Apple announced a new three-floor store in Beijing, which will be its largest in Asia.