Apple seeks to expand its reach in China

BEIJING: Apple, the electronics group, will expand its retail network and distribution base in China, reflecting a desire to further drive up sales in its second-largest global market.

The firm lodged sales of $6.8bn in its Greater China region – comprising Mainland China, Hong Kong and Taiwan – during the last three months, a lift from $5.4bn quarter on quarter and $4.1bn year on year.

Its latest Chinese revenues can also be compared with those of $4.4bn in Japan and $4bn in the rest of Asia combined, and stood at more than 50% of the $12.5bn generated by the whole of Europe.

China is the the company's second-biggest market, behind the US. "It's clear there is a lot of potential there," Tim Cook, Apple's chief executive, told analysts on a conference call.

"I was just over there recently, and I was talking to a lot of different people and I am very happy with how things are going," he added.

Cook reported that the iPhone 5 posted growth "into the triple digits" in China in the last quarter. The latest iPad, which was shipped to the country in late December, also saw "very nice growth", he added.

One strategy the organisation is employing to build on this momentum is expanding its retail network across Greater China, which has almost doubled in size in 12 months.

"In the year ago quarter, we had six stores. We now have 11. We obviously have many more to open there," said Cook.

The number of "premium resellers", or stores exclusively selling Apple's Macs, iPads, iPods, software and accessories, in this area also rose from around 200 last year to over 400 at present.

Similarly, the points of sale for the iPhone shot up from 7,000 to 17,000 in this period, with additional growth planned going forwards.

"This isn't nearly what we need and it's not the final by any means, we are not even close to that, but ... I feel that we are making great progress," said Cook.

Sandy Shen, an analyst at Gartner, the insights firm, said smaller cities would be the next target. "They have well penetrated the tier-one and tier-two cities, so now they are looking to expand to the lower tier cities by partnering with distributors and retailers," she argued.

Data sourced from Seeking Alpha; additional content by Warc staff, 25 January 2013

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