When Apple reported its third quarter earnings yesterday after market close, the news were mostly positive. In what is traditionally Apple's weakest quarter, iPhone sales were slightly better than expected, iPad sales returned to growth after a 13-quarter slump and the company’s services business continued to impress.
The only apparent weak spot was once again Apple's China business. After five consecutive quarters of double-digit sales declines in the Greater China region, the company reported a 9.5 percent decline in revenue from the region this quarter. In fact, Greater China (including Hong Kong and Taiwan) was the only region to see a sales decline compared to the previous year, which is all the more noteworthy considering that things went great in the rest of the Asia Pacific region (+15 percent in sales).
Despite a its leading position in the high-end segment of the Chinese smartphone market, iPhone sales were flat year-over-year as domestic vendors continue to tighten their grip on the world’s largest smartphone market. As our chart illustrates, Apple’s former growth motor has been stuttering for 18 months now.