Image source: Apple.
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One of the negative storylines to emerge from Apple's (NASDAQ: AAPL) fiscal fourth-quarter earnings release last night was a notable plunge in Greater China revenue. Sales in the Middle Kingdom plunged an alarming 30%, which is sure to illicit negative gut reactions. I'm a big believer in context, since context can help you assess relevance. And the broader context here is that Apple's long-term trajectory in China is still heading in the right direction, and the short-term decline is mostly a consequence of a tough comp.
Apple crushed it last year in China.
A long and winding road
For starters, here's Apple's quarterly Greater China revenue over the past three years.
Data source: SEC filings. Fiscal quarters shown. Chart by author.
There's quite a bit of seasonality built in there, and CEO Tim Cook suggests that investors zoom out a little bit:
So let's zoom out, but more than a little bit.
Data source: SEC filings. Fiscal years shown. Chart by author.
Ignore the year-over-year comparison for a moment. We're talking about a geographical operating segment that brought in $48.5 billion in fiscal 2016. Sure, that's down from 2015, but it's way up from fiscal 2012 or prior years. I used to track Apple's Greater China revenue before it began officially disclosing it as a separate segment, by triangulating data points and management comments from conference calls. It may shock you to learn that in fiscal 2009, just seven years ago, Apple brought in less than $900 million in Greater China revenue.
And look where Apple is today. Not so bad now, is it?
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Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.