Fifteen point five.
That's a number that all Apple (Nasdaq: AAPL) shareholders need to know. Why? Because that's how many times Apple grew its Greater China revenue from fiscal 2009 to fiscal 2011. Apple doesn't explicitly report its Greater China revenue, which is defined as sales from Hong Kong, Mainland China, and Taiwan. Instead, it reports a broader Asia-Pacific operating segment.
Putting it all together
However, on various recent earnings conference calls, CEO Tim Cook has disclosed specific figures for the important segment. He has said that Greater China comprised just 2% of fiscal 2009 sales, which translates into roughly $858 million based on Apple's revenue of $42.9 billion that year. He also mentioned that the figure rose to just over $3 billion in fiscal 2010, and during the most recent call Cook indicated that fiscal 2011 Greater China revenue was $13.3 billion.
That figure is 15.5 times as large as it was just two years prior. Meanwhile, Apple's overall revenue grew by "just" 2.5 times over the same time frame, so you can see just how quickly that geography is growing and how important it is for the iPhone maker. This is what it looks like if we simply normalize those 2009 levels at 1 to illustrate the growth.
Sources: earnings conference calls and press releases.
The strength there is largely what's driving Asia-Pacific growth, which jumped from $3.2 billion in 2009 to $22.6 billion last year, and currently sits at $17.9 billion with two quarters in the fiscal year to go. Here's how each segments looks in dollar terms, with 2012 year-to-date figures shown in different shades.
Sources: earnings conference calls and press releases.
In two quarters, Apple's Greater China sales of $12.4 billion are already nearly as high as they were throughout all of last year at $13.3 billion. Greater China continues to represent increasingly large portions of total revenue and Asia-Pacific sales.
Sources: earnings conference calls and press releases.
This is why the inevitable partnership with China Mobile (NYSE: CHL) is so critical, because it will open up a whole new world of opportunity for the company within the nation as the largest wireless carrier. The carrier is now up to 677.5 million total subscribers, making it the largest in the world by a healthy margin. It's also why the prospect of having Apple finally launch its third-generation iPad in the country, now that it has settled the Proview trademark dispute, is so promising.
Market share vs. profit share
Interestingly, even though rival Samsung is leveraging Google (Nasdaq: GOOG) Android very successfully in China, enjoying more than three times the smartphone market share with its gadgets, its overall China revenue is roughly unchanged between 2009 and 2011 at around $20.2 billion. Since Sammy is one of the world's largest electronics conglomerates, making everything from TVs to washing machines, this must be explained by shrinkage in other segments.
Meanwhile, Android also continues to lead Apple strictly in terms of market share, with Beijing-based Analysys International pegging Android's fourth-quarter market share at 68.4%, towering over iOS and its 5.7% slice.
Microsoft (Nasdaq: MSFT) plans on kicking up the competition in China by incrementally driving down costs, much as it did during the PC era decades ago, to boost its market share. The software giant's Greater China head, Simon Leung, said it was targeting the important 1,000 yuan price point to gain traction. Leung has since resigned, though, because of personal and family reasons, and execs from its European operations are now taking the helm.
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