Opinion: By the iPhone’s 10th anniversary, China will be Apple’s biggest market


The old world was a simple one. Apple needed two things to succeed: a well-off market willing to pay a premium price for its products, and a low-cost manufacturing base to build them. The U.S. and Europe provided the former, China the latter.

The idea that China could become Apple’s biggest market in less than a decade would have seemed unimaginable back when the first iPhone went on sale in 2007. It now looks inevitable.

Let’s run the numbers … 

China has already overtaken Europe. Apple’s Q4 revenues from Greater China (comprising mainland China, Hong Kong and Taiwan) were $12.51B – dwarfing the $10.57B it earned in Europe (a region comprising around 50 countries, depending how some of them are defined). And you can pretty much ignore Hong Kong and Taiwan: Apple has reported that 96% of its Greater China sales are from mainland China alone.

At first glance, it might seem that the U.S. remains comfortably ahead, at $21.77B. But that lead isn’t as comfortable as it looks, for two reasons. The minor one is that the number is actually for North and South America combined, and Brazil is becoming an increasingly important market for Apple. The number for the U.S. is thus smaller than it appears.


But the bigger reason is the pace of growth in China. Apple has doubled its year-on-year revenues from Greater China two quarters running (technically, the Q4 increase was 99%, but I don’t think we need quibble over a single percentage point).

iPhone sales in China are growing even faster than revenue: they were up 120% year-on-year. The iPhone 6 is now the best-selling smartphone in China; the 6 Plus is number 3.

Nor is it a case of selling lots of low-end iPhones. While Apple hasn’t broken down the numbers, the company’s SEC filing gives a clue. As the WSJ notes, Apple’s profits in China are growing at an even faster rate than its revenues and sales. Its gross margins in the country have grown from 31% in fiscal 2013 through 35% in 2014 to 39% today.


But could Apple’s China sales really overtake those of the U.S. by the 10th anniversary of the iPhone? The numbers say yes. With revenue doubling year-on-year, one more year would comfortably do it.

The analysts say yes. Two analysts interviewed by CNBC earlier this year see it happening within six months.

Tom Kang, research director at Counterpoint Research, expects China could overtake the U.S. as its biggest sales market even sooner – by the January-March quarter of 2016.

And Tim Cook has very nearly said yes. He hasn’t ever put a date on it, but his statements that it will happen have grown increasingly frequent.


Against that, there is China’s sluggish economy. But as I argued back in August, that isn’t necessarily an issue for Apple, as it isn’t subject to the performance of the economy as a whole, only that of the growing middle class. Cook recently confirmed my view, stating that “you can’t really tell a difference if you look at our daily and weekly numbers.”

With the numbers, analysts and Cook’s statements all falling in line, I’d wager good money that long before June 29th, 2017 — the 10th anniversary of the release of the first iPhone — China will be Apple’s largest market.

Photos: Shanghai (Apple); Hong Kong (Daily Venture); Zhongjie Joy City (Leopold Fan); Hangzhou (Apple)

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  1. presslee - 7 years ago

    Well, china dose have 4x the us population. Meaning 4x more iphones.

    • Gregory Wright - 7 years ago

      Funny how mathematics can explain almost anything.

    • Ben Lovejoy - 7 years ago

      It’s not quite that simple, of course, as you need to consider the demographics. Even in urban areas, the average salary in China is only around $9000, and much lower in the rural areas. But the pace of growth in both salaries and demand for premium goods is tremendous.

      • Grayson Mixon - 7 years ago

        Is that $9,000 just based on the exchange rate, or adjusted for the cost of living? Florida and California both use dollars, but dollars are worth more in Florida because the cost of living is lower. So, $100,000 a year in Florida is about $250,000 in California. People in Florida get paid less, but things cost less.

        If they are making $9,000 in China just using the exchange rate, is that equal to $18,000 in Florida because things cost half as much there?

      • Ben Lovejoy - 7 years ago

        That’s a good point; and from my limited experience of China (around a dozen short trips, all but one to major cities) the cost of living is significantly lower – though luxury goods tend to be priced much the same as anywhere else.

      • Well, in Slovakia people make $6,000 per year and $9,000 in average so…

      • Ilko Sarafski - 7 years ago

        It’s really hard to say “average” in China due to the fact that they are just… a lot. Their urban areas are 500 milion or so. :D So if we have data for different societies (graduated, job in a worldwide corporation, etc), then we might pull something out of it. Yet, I know what you are talking about. The question is – what will happen when that happen? Will anything change? Will Apple focus on Chinese Siri?!? Other than that, what does it matter where is the biggest market? I am curiously looking forward to see what will Apple do in that regard. P.S. Average salary in Bulgaria – 2500 euros/year. In Sofia (capital) – 4000 euros. (Give or take of course)

  2. standardpull - 7 years ago

    The US economy is growing at a great rate, and sales to China will actually help the US economy continue to grow. A lot of the income generated by iPhone sales pays for a lot of high tech (and non-high tech) jobs in the States.

    Despite that the Chinese economy has been suffering, its middle class population is growing quite nicely – the economic downturn there has harmed more speculators than the average joe.

    But not only that – this also helps China. iPhones (and smartphones in general) are mostly manufactured in China, so a considerable percentage of the money spent on iPhones stays there.

    This even helps Apple’s competitors and partners. As iPhone market grows, those competitors will have a larger market to compete within. Apple does not have a monopoly (or even a majority) of the smartphone market anywhere. Those other players, in aggregate, will continue to see their profits grow – perhaps at a different growth rate, but grow none the less.

  3. charismatron - 7 years ago

    I really like some of the changes implemented by Apple to appeal to the Chinese market (i.e. colours). I’m really excited about what new changes we’ll see when Apple starts growing massively in India.

  4. Dan (@danmdan) - 7 years ago

    OK if Apple goes along with China’s attitude to Human Rights – he who sups with the devil must needs have a long (and conveniently pliable) spoon !


Avatar for Ben Lovejoy Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!

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