During the tail end of the March quarter, the Chinese media was conducting an all-out blitz against Apple Inc. (NASDAQ:AAPL) . The Mac maker was being criticized for its warranty practices, and state-owned media outlets were out looking for blood.
It continued for two weeks before CEO Tim Cook took a stand, issuing a formal apology to set the record straight, acknowledging some miscommunication and tweaking of warranty policies. Cook’s letter was immediately well received, with the Chinese media promptly flipping its stance and praising the company for its quick response.
Ahead of Apple’s earnings, I wondered if the damage had already been done, since the “Greater China” segment is Apple’s hottest growth geography and the anti-Apple campaign spanned nearly a sixth of the quarter. With Apple Inc. (NASDAQ:AAPL)’s figures now out, let’s take a look.
The meddling Middle Kingdom
Apple’s reported Greater China revenue climbed to $8.2 billion. However, this figure doesn’t include retail operations, and Apple has 11 stores in the region. Including retail revenue, total Greater China revenue was $8.8 billion. That’s a new record, but Apple Inc. (NASDAQ:AAPL) is seeing some growth deceleration as its now growing off a larger base.
The falling growth rates are what some investors may be worried about, though.
There are several ways to dig deeper.
First, investors can get a sense of consumer sentiment by looking at Apple’s retail operations in China. Apple Inc. (NASDAQ:AAPL)didn’t open any new stores in the region, but it did open four in China late last year. Retail revenue put up a solid 25% sequential gain to $587 million, and average revenue per store climbed from $42.7 million to $53.3 million.
Apple’s retail business in China didn’t seem to suffer. Keep in mind that the first quarter is the holiday quarter in the Middle Kingdom, which is why sequential growth is expected.