Apple's Tim Cook Heading to China to Improve Relations With Leaders - Page 2

Tuong H. Nguyen, an analyst with Gartner, told eWEEK in an email reply that Cook's visit "won't impact the economic environment" between the two but that his "visit might open the way for appealing current decisions."

Nguyen said he is "reluctant to say that Tim Cook's visit will significantly help, but I certainly don't think it could hurt."

In late April, government regulators in China without warning shut down Apple's online iBooks Store and iTunes Movies service, which had opened six months before, leaving Apple working with the communist government to try to restart the services. The shuttering of the Apple services occurred despite permission that Apple was previously granted by the government when the services began there last year, according to an earlier eWEEK story. Apple in a statement at that time said it hopes to "make books and movies available again to our customers in China as soon as possible."

Apple has been garnering more and more of its revenue from China the last several years, according to the company's revenue reports. In January, Apple reported $18.37 billion in revenue from China in its first quarter of 2016, which made up about 24.2 percent of the company's $75.87 billion in revenue for the quarter. In the fourth quarter of 2015, Apple reported $12.52 billion in revenue from China, out of a total of $51.5 billion, according to earlier eWEEK reports.

China is Apple's second-largest global market behind the United States. The company began selling iPhones in China in October 2014, after gaining government device security approvals.

As Cook heads off soon to China, Apple is also still dealing with disappointing recent quarterly financial news. On April 26, Apple reported a quarterly decline in revenue for the first time since 2003.

Apple reported second-quarter revenue of $50.6 billion, down 13 percent from $58 billion a year earlier. Net income in that interval fell to $10.5 billion from $13.6 billion as sales of the company's flagship iPhone smartphones leveled off, ending Apple's 13-year record of uninterrupted sales growth. Apple's latest iPhone 6 models went on sale last September.

In its latest quarter, Apple reported sales of 51.2 million iPhones, down 18 percent from 61.2 million iPhones sold in the same quarter one year ago. The latest quarter's iPhone sales were down sharply—by 32 percent—from the 74.78 million sold in the first quarter of 2016. Revenue from iPhone sales dropped to $32.9 billion in the second quarter, down 18 percent from $40.3 billion one year ago.