Author|Lin Zhang

Apple has released its fourth fiscal quarter results for fiscal year 2024, ending on September 28.

In terms of revenue, this was another record-breaking quarter for Apple, with total revenue reaching $94.9 billion, a 6% year-over-year increase. Net income also reached $14.736 billion. Excluding the impact of the $10.2 billion repayment due to the overturning of a European Union General Court ruling on state aid, Apple's net income for this quarter would have been as high as $25 billion, a 12% year-over-year increase.

Specifically, looking at product revenue composition, iPhone, Mac, iPad, and services all achieved positive year-over-year growth in this quarter, while the wearables and home segment experienced a 3% decline.

From the perspective of regional market revenue composition: In major global markets, excluding China, Apple is experiencing slow but steady growth. While China's market is recovering, it is still in a phase of negative growth. Revenue in China for this quarter was $15.033 billion, a 0.34% year-over-year decrease, lower than the $15.084 billion recorded in the same period last year and falling short of analysts' forecasts of $15.8 billion.

This quarter's financial report may also indicate Apple's business direction in the coming period: slow but steady growth in global markets and persistent challenges in China.

As we can see, despite Apple's immense business volume, in terms of this quarter's revenue data, the Americas, Europe, Japan, and other parts of Asia Pacific all achieved year-over-year growth. This is a fact and has been a long-term trend.

It can be said that in major markets outside of Greater China, Apple's business is in a phase of slow but steady growth. In emerging markets such as India and Latin America, Apple is also finding new growth opportunities.

For example, during this quarter's earnings call, Apple stated, "We are excited about the continued growth in enthusiasm for the Indian market, where we have set new historical highs. We will continue to expand our retail store presence in India."

However, in the Chinese market, Apple products have failed to propel the company forward at the same pace as in other global markets.

Data shows that although the launch of new iPhones helped narrow the quarterly decline to just 0.38% compared to the previous quarter, this performance is still well below analysts' expectations of $15.8 billion.

This may indicate that Apple faces long-term growth challenges in the Chinese market.

The key reasons for these challenges are: The Chinese market is the most competitive globally, and while Apple faces competition in China, it also grapples with difficulties in technology implementation.

In terms of intense competition:

Among the top seven smartphone vendors globally, five are from China. With Samsung's decline in the domestic market, Apple effectively faces a five-to-one situation in China. Compared to domestic vendors' strategy of releasing multiple products per year, Apple's annual product refresh strategy puts it at a relative disadvantage in capturing consumer attention and quickly implementing new technologies.

Moreover, it cannot be overlooked that domestic vendors' current products are rapidly converging with Apple's. This is evident in both product design and special features.

A review of the latest domestic products reveals a uniform trend towards iPhone-like designs with ultra-narrow bezels and straight edges. Some even include a camera button similar to the iPhone 16 series. Dynamic images, Dynamic Island, Airdrop, and other features originally exclusive to iPhones have now been adopted by major vendors and integrated into their latest systems. Thus, the industry trend is now to "hollow out Apple" and offer viable alternatives.

Additionally, domestic vendors are ahead of Apple in photography and charging technologies. Coupled with similar designs, features, price advantages, and localization benefits, the growing strength of domestic brands is undeniable.

Given this reality, how Apple can continue to stand out amidst domestic vendors' "catch-up and surpassing" efforts is a question the company must answer in the coming period.

From the perspective of localization challenges:

This localization advantage not only allows domestic vendors to delve deeper into understanding user needs and expanding into lower-tier markets but also facilitates the implementation of key technologies. Domestic vendors are outpacing Apple, especially in the hottest area of generative AI technology, where their domestic market deployment speed far surpasses Apple's.

Many domestic vendors are following Apple's Apple Intelligence approach by building and deploying system-level AI experiences, encompassing system-level notification summaries, visual recognition, and screen context awareness.

However, as the originator of this concept, Apple's AI technology has yet to be implemented in the domestic market. This has resulted in the iPhone 16 series, marketed by Apple as tailored for Apple Intelligence, offering nearly zero AI experience in the domestic market, prompting Apple to awkwardly state on its official website, "Ready for Apple Intelligence."

Apple has not provided a definitive timeline for when Apple Intelligence will truly take root in the domestic market, only indicating that it could happen next year.

While there is no concrete data on the impact of AI technology on consumer purchasing decisions, in a highly competitive market, the absence of AI technology can certainly be a detriment.

Final Thoughts:

Although Apple mentioned during its earnings call that according to a Kantar survey, the iPhone is the best-selling model in the United States, Chinese cities, the United Kingdom, Australia, and Japan. With the entire iPhone, iPad, and Mac lineups now prepared for Apple Intelligence, Apple has assembled its best product lineup for the holiday season.

All these factors may pave the way for Apple to continue setting records in the first quarter of fiscal year 2025 globally.

However, in China, Apple's third-largest market, facing intense competition, the company still needs to push forward with the implementation of Apple Intelligence and introduce more innovations to win back consumers' favor.