Apple Inc. (AAPL): Chinese Consumers Key Market Rather than Government


It was earlier reported that the China had banned the use of some Apple Inc. (NASDAQ:AAPL) products in government agencies stating national security concerns. However, the Chinese government and Apple Inc. (NASDAQ:AAPL) both have refuted the reports. The procurement list that was being reported in the media was in fact a list of energy saving products, and Apple Inc. (NASDAQ:AAPL) had never been part of the list nor had applied for it, the Chinese Finance Ministry is reported to have confirmed. Given that China is a major market for Apple Inc. (NASDAQ:AAPL), Cory Johnson discussed on “Bloomberg West”  about China’s role in Apple’s revenue figures.

Apple AAPL

The ten products that were speculated to be banned include versions of the iPad tablet and MacBook laptops. 

Talking about the impact of the ban on Apple Inc. (NASDAQ:AAPL)’s revenues, Cory Johnson said that there was no information available on the spends by the Chinese government on procurement of technology products, nor had Apple Inc. (NASDAQ:AAPL) divulged any information on the same.

“We know in terms of government spending, it is about the same as U.S. in terms of percentage of GDP. So we do not  how much of that is spent on information technology, but we do know how important China is to Apple Inc. (NASDAQ:AAPL) however. Apple Inc. (NASDAQ:AAPL) coming into China in the last few years has become a significant part of Apple Inc. (NASDAQ:AAPL)’s overall revenue picture. And we have seen that growing dramatically over time,” he added.

China is also an important profit center for Apple Inc. (NASDAQ:AAPL) and accounted for $5 billion in the last year. Greater China accounted for 16% of the company’s revenue in the last quarter. He concluded stating that while China is certainly a significant market for Apple Inc. (NASDAQ:AAPL), it is the Chinese consumers and not the government who are the key market.

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