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Apple’s iPhone Sales Face Test in China

If there’s one thing Apple can count on in China, it’s a pop in sales after it releases a new batch of iPhones. The question is whether its revenue growth is good enough.

If there’s one thing Apple Inc. can count on in China, it’s a pop in sales after it releases a new batch of iPhones.

Last year, the company sold 2 million units of its iPhone 5 in China in the first weekend of its release. A similar jump is likely behind the 6% revenue growth in Greater

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China for Apple’s fiscal fourth quarter ended Sept. 28. The Cupertino company’s revenue for Greater China, which includes Hong Kong and Taiwan, rose to $5.7 billion in the period from $5.4 billion a year earlier.

The question for Apple in China is whether the 6% growth is good enough. The quarterly figures include roughly the first week of sales for the new iPhone 5S and 5C in China, so the big test will be whether those sales will be sustained. The latest figures compare to last year’s quarter when Apple had yet to release its newest phone. This year marked the first time that Apple released its new iPhones in the mainland on the same day as other major markets like the U.S. and Japan.

During Apple’s earnings call, Chief Executive Tim Cook said the figures represented a “pretty good quarter.” Indeed, any growth in China is good. An unending stream of low-cost handsets from ascendant local handset makers is making the world’s largest smartphone market one of the world’s most competitive.

But it’s an open question whether Apple’s new round of iPhones, which rank easily among the most expensive in China, can buck the trend of customers here increasingly paying less for smartphones that pack in the highest specs. The sales are going not just to Apple’s Android rivals like Samsung Electronics Co. and HTC Corp., but also local brands like ,Group Ltd., Huawei Technologies Co. and Beijing Xiaomi Technology Co.

Also at issue is what long-term impact a continuing government campaign against lavish spending by Chinese officials and a spate of criticism by Chinese state media of Apple’s warranty policies will have on the company’s sales here.

In China, electronics sales tend to spike ahead of the holiday period, though that’s because of Chinese New Year, which this year falls at the end of January, as opposed to Christmas. That means it could be a nervous holiday season for Apple in China.

Still there’s at least one factor that will help keep Mr. Cook keep cheery as Chinese New Year approaches. Apple is likely to soon begin selling the iPhone in China through the country’s largest mobile carrier, China Mobile. That gives Apple new access to China Mobile’s 700 million customers and also the support of the world’s largest telecom carrier, which is likely to push out subsidies to help spur sales of the phone once it goes on sale.

Under that light, the most important remark made by Mr. Cook about Apple came just after he called the quarter a good one, when he said, “We want to do better [in China].”

If the company doesn’t in the next three months, it might mean it needs to change tack. After all, it’s worth figuring out why the company can generate $13.9 billion in revenue from the world’s second-largest smartphone market, the U.S., but only $5.7 billion in its largest.

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