China is still dragging Apple down

Jeff Dunn

Oct 27, 2016, 01:11 IST

Apple has suffered its first annual revenue decline since 2001. Though that means the company "only" generated $215.6 billion in the past year, the drop has still made plenty of analysts skeptical.

One of the biggest drags on Apple's earnings has been China. After being touted as a major source of growth potential by CEO Tim Cook, and after enjoying big success there to start, Apple has suffered a continuous series of sales declines in the region over the past few quarters. This past quarter, its China sales fell 30%.

As this chart from Statista shows, the company's dollar sales growth in China has dropped by $10.2 billion in the last year. Over that time, the iPhone has lost big swaths of market share to local upstarts like Oppo and Vivo. The company has also run into a number of regulatory issues with local officials.

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On Thursday's earnings call, Cook remained bullish, noting China's wider economic struggles and saying the iPhone's initial gains gave it further to fall than usual. The company is confident iPhone 7 and 7 Plus sales will give it a boost. And if the 2017 iPhone is as mindblowing as its already massive hype suggests, that should only help.

But there's a reason Cook and company are putting more eyes toward India: The sharks want growth, and Apple hasn't really shown how it's going to get more of it from its former cash cow.