Apple’s China Syndrome

An Apple Store in Shanghai decorated for Lunar New Year. Photo via Getty.

Apple had good news and bad news when it reported December-quarter results on Thursday. The bad news was that revenues from China—Apple’s second-biggest market—shrank 11%, almost certainly a result of Apple losing share in smartphones to local rivals such as Huawei. Indeed, iPhone revenues globally shrank 0.8% in the quarter.

The good news is that despite the falloff in China, Apple’s top line expanded 4%, thanks to solid growth in sales of both Macs and iPads, as well as another sterling quarter for services, the segment that includes Apple Music, Apple TV+ and AppleCare. Net profit rose 7% to $36.3 billion. Apple shares rose 3% in after-hours trading. All in all, it wasn’t a bad quarter for a mature, barely growing company.