One of everything

Apple does it again: Apple is gorging on an all-it-can eat Chinese buffet. The $350-billion iPhone maker’s sales surged 82 per cent in the past quarter from a year earlier, to reach $28.6 billion. Much of this eye-popping increase can be pinned on Asia — which now accounts for just under a third of all sales — and Greater China in particular, in which Apple includes Taiwan. There, revenue rocketed more than six-fold to just under $4 billion. Growth shouldn't slow any time soon there, but keeping up could be a challenge.

Apple sold 20.3 million iPhones and 9.3 million iPads during the quarter. Since the majority of the firm's revenue is still in developed countries, it means most were bought in places like the United States and Europe. There, sales growth was “only” somewhere above 50 per cent in each region.

Happily for Apple, rich nations still have untapped growth. The company is due to release new versions of its operating system for computers on July 20 and for mobile devices in the fall. And an updated handset and Macs, and perhaps even a new iPad, should roll out before the end of the year if product cycle history and the rumor mill are good guides. That means many existing Apple users will want to upgrade, and newcomers try its gadgets.

True, iPad tablets may be cannibalizing computer sales. That's one reason the number of Macs Apple sold rose a relatively disappointing 14 per cent. But that's still almost three times the pace of growth in the PC market as a whole. Further, Apple has a relatively small share of that market, so any erosion is mainly at the expense of other manufacturers.

But it's China — with an honourable mention for Latin America and West Asia — where Apple has the biggest opportunity. Apple is offering its phones to more and more carriers. China Mobile, with 600 million subscribers, is an obvious target. Very few customers yet have smart phones, but incomes are rising; Apple said it is “just scraping the surface”. The company is already selling iPads as fast as it can make West Asia. Rather than finding customers, Apple’s biggest problem may turn out to be producing enough quality gadgets quickly enough.