43% China revenue slump sours Apple iPhone sales figures as rival announces profit growth

Apple’s better than expected iPhone sales figures have been soured by the announcement of a massive slump in revenue from the key markets of China, Taiwan and Hong Kong, in sharp contrast to a key competitor.

According to Reuters, Apple sold 31.2 million smartphones during the fiscal third quarter, beating analysts’ estimates of 26 million units.

However, the company’s revenue from Greater China (mainland China, Taiwan, Hong Kong and Macau) fell 43% quarter-on-quarter, and 14% year-on-year, with the percentage of Apple profits coming from the middle kingdom falling to 13% between April and June, down from 19% the previous quarter.

According to PC Pro, the decline in sales from China led to a drop in profit to $US7 billion, down from $US8.8 billion a year earlier, despite revenues up slightly to $US35.3 billion from $35 billion a year earlier.

Apple chief executive Tim Cook defended the result, claiming a large number of first-time smartphone buyers are choosing the iPhone.

“I don’t subscribe to the common view that the higher end, if you will, of the smartphone market is at its peak. I don’t believe that, but we will see and we will report our result as we go along.

“There are always more weapons, and we have more than one tool in the toolbox. It’s a great way for a buyer to get into the iOS ecosystem and the customer set ratings that we have with iOS 6 and the stickiness of the platform is huge,” Cook says.

The news came as Chinese telecommunications giant Huawei posted half-year revenues of CNY 113.8 billion ($20 billion), up 10.2% year-on-year.

Without quoting a figure, the company’s statement says it expects a net profit margin of between 7% and 8% in 2013, compared to 7% in 2012.

“Our success in [the first half of] 2013 was mainly driven by the steady growth of the carrier network business, the expansion of the enterprise business, and the fast growth of the consumer business, as well as the continuous enhancement of our overall operational efficiency. Revenues and profits are in line with our expectations,” Huawei chief financial officer Cathy Meng says.