Tim Cook Sees China's Future Bright For Apple – Describes China As 'The Most Competitive In The World'

Apple’s China sales just took a nose-dive. Revenue dropped to $14.73 billion last quarter, down 6.5% from last year. CEO Tim Cook is keeping his chin up about the future in China, but there’s a snag – Apple's new AI feature, Apple Intelligence, isn't launching there yet.

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China, including Hong Kong and Taiwan, is Apple's third-biggest market. But this time around, it's the only one that slipped. Cook says currency swings are mostly to blame, with more than half the drop coming from foreign exchange rates. Strip that away, and the decline is actually under 3%. Still, Apple fell short of what analysts expected –$15.26 billion.

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Cook isn't waving the white flag. On a conference call with investors, he called China “the most competitive market in the world” and pointed to some good news, like a record number of iPhone upgrades in the June quarter. “That's a very strong signal,” he said, showing he's not ready to count Apple out yet.

But let's be real – the challenges are piling up for Apple. Even with deep discounts, Apple saw the iPhone slip out of the top five in China's smartphone rankings. That's a big deal. According to Canalys, iPhone shipments in China dropped 2% from last year, pushing Apple down to No. 6 among smartphone makers. It's the first time in years that Apple isn't in the top five in one of its most important markets.

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The road ahead? It's rocky. Apple is banking on its new AI features to spark fresh growth, but getting that tech into China is no small feat. Apple Intelligence, the shiny new AI, rolled out with iOS 18.1, but China didn't cut it.

Cook knows this is a sticking point. He said Apple is “very constructively engaged” with regulators in China and the EU. However, until Apple can jump through these regulatory hoops, Chinese users will be out of luck with Apple Intelligence. That leaves a big question about whether Apple can regain its footing in this all-important market.

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