Apple Should Clue Us In on Its Chinese Puzzle

The bull or bear debate about Apple hinges in large measure on one question: Is a 21 percent slide in sales in China over the last year a temporary hiccup or a sign of permanent change in the world's largest market for smartphones?

Apple's booming stock price is tied largely to expectations that the next versions of the iPhone will unleash a surge of sales, particularly in China. The biggest share of Apple’s revenue growth in the last four years -- about one-third of the $51 billion gain -- came from the region that Apple calls Greater China, which consists of China, Hong Kong and Taiwan. The new iPhone is expected to reverse what has been five consecutive quarters of falling sales in the region. Bernstein Research estimates iPhone unit sales in China may jump by 35 to 40 percent in Apple's fiscal year ending September 2018.