By Chris Smith

Published: 08:46 PM EST (05:46 PM PST)

During Apple’s quarterly earnings call on Tuesday, the company detailed record sales of $4.5 billion in China for the September quarter, highlighting “amazing” progress in the region and continued opportunities among its burgeoning middle class.

Apple CEO Tim Cook said that China has become Apple’s second largest country in terms of revenue. “The China progress has been amazing,” he said, concluding that the area shows “enormous opportunity for the company.”

He added that the Cupertino, Calif., company will do everything it’s doing in the United States to sustain growth in the region, with strategies such as retail stores, online, APR channel, 3rd party channel and advertising. Cook further acknowledged that he has never seen a country with so many people moving into the middle class interested in buying Apple products.

Revenue in the Asia Pacific region grew by 139 percent year over year, or $6.53 billion. By comparison, the Americas and Europe generated $9.64 billion and $7.39 billion, respectively.

In China, revenue rose from 2 percent in 2009 to 12 percent this year and 16 percent this quarter, thus making China “the fastest growing region by far.” Total revenue for China amounted to $15 billion for fiscal year 2011 compared to $3 billion in the previous year. Apple last quarter reported $3.8 billion in revenue in the region.

The company recently opened its sixth store in the Greater China region, an impressive flagship location situated in Hong Kong. Combined, the existing five retail stores in mainland China accounted for the most store traffic during the fourth quarter. Apple reported a record of 77.5 million visitors for its 357 stores in the September quarter with revenues averaging at $10.7 million per store.

On top of the company’s official retail stores, there are 7,000 points of sale in Greater China for the iPhone.

Apple is looking to further consolidate its position in China by investing in more stores and other unspecified projects. The company reportedly said last year that it plans to open 25 retail stores in the region within the next few years. Apple is set to open 40 new retail stores globally in the first quarter of fiscal year 2012, with 75 percent of them planned for countries outside the U.S.

Earlier this year, the iPhone maker indicated plans to learn from its successes in China as it turns its attention to other emerging markets. As such, the company has said it will also focus on other regions in the following quarters including Brazil, Russia and the Middle East.

Revenue in Brazil topped $900 million last quarter, up 118 percent year over year. According to Cook, Russia is looking “more promising,” while the Middle East poses “significant opportunities” for Apple.

By Josh Ong

Published: 12:26 AM EST (09:26 PM PST)

Police in Shanghai, China have arrested five suspects accused of participating in a complex iPhone counterfeiting outfit that used genuine parts to make and sell convincing fakes of Apple’s bestselling smartphone.

As noted by Reuters, the Shanghai Daily reported on Thursday that the accused were members of a well-organized gang that brought in components from Guangdong and assembled the devices in Shanghai. 200 counterfeit iPhones were confiscated during the operation, the report noted.

The cost of making the fake iPhones is said to be roughly 2,000 yuan ($313) per unit, a high cost because the counterfeiters use some genuine parts. The fakes were sold in grey markets and online for more than 4000 yuan, only “a few hundred yuan cheaper” than the price for an official iPhone from the Apple Store.

“High-end” counterfeit iPhones such as these are nearly as expensive to make as the real thing. When the iPhone 4 was released last year, one research group claimed the device had a bill of materials of $188. Although Apple has dismissed the estimates as inaccurate, the company’s costs for building an iPhone are not likely to exceed $313, given the high margins that it enjoys for the product.

Police noted that the fakes had the same functions as Apple’s genuine iPhones, but with a shorter battery life. “It’s really hard for customers to distinguish the fake ones from the genuine ones,” said officers who had met with Apple’s engineers.

Counterfeit Apple products are readily available in China, despite escalated efforts by the company to address the issue. Last month, Wikileaks released diplomatic cables that documented an Apple security team member as saying he was “afraid” of the amount of fake apple products coming out of China.

Apple has also had to work to combat counterfeit products making their way into the U.S. The company recently settled a suit against two stores in New York that were allegedly selling counterfeit accesories. Earlier this year, L.A. port authorities seized millions of dollars in counterfeit iPhones and iPods arriving from Asia.

In July, an elaborately-designed knockoff Apple Store, replete with a winding staircase and blue t-shirts with Apple logos, was discovered in Kunming, China and drew international attention. Chinese officials subsequently conducted an investigation of Apple resellers in the city, closing several because of permit issues.

Credit: BirdAbroad

Apple is gearing up to release its next-generation smartphone at a media event on Oct. 4. The so-called iPhone 5 is expected to be “fairly different” from last year’s model, with an 8-megapixel camera and an A5 processor.

By Neil Hughes

Published: 09:31 AM EST (06:31 AM PST)

J.P. Morgan revealed on Monday that its proprietary research suggests Apple will release two new iPhone models this fall: a newly redesigned “iPhone 5,” along with an upgraded “iPhone 4-plus” that would target midrange smartphone buyers, particularly in emerging markets like China.

Analyst Mark Moskowitz said in the note to investors that he expects the new fifth-generation iPhone to have a thinner and lighter form factor, and to also include both CDMA and GSM radios for a “world mode” handset, though no support for 4G long-term evolution. The so-called “iPhone 5″ is expected to have a larger Retina display with a “significant” but not “radically different” change in physical design.

“The new iPhone 5 stands to be based on the iPad 2′s A5 processor or a newer A6 version,” he said. “We also expect 1GB of RAM to increase memory access times.

“Other improvements are increased battery life due to advancement in battery technologies, the printed circuit board (PCB), the touch screen, and LCD power consumption metrics.”

But the so-called “iPhone 5″ won’t be the only new handset from Apple this fall, Moskowitz claims.

“A second device (4-plus) based on the current iPhone 4 but with some minor improvements could target the midrange and focus on China,” he said. “As for the current iPhone 4, we expect it to subsume 3GS as the lower-end offering.”

Moskowitz said his research has indicated that the “iPhone 4-plus” could target one or more carriers in China. While he thinks a China-focused handset is in the works, he does not expect it to be exclusive to the nation of over 1 billion people.

“There could be other use cases, particularly in the midrange,” he said. “Either way, the size of the China opportunity overcomes any potential drawbacks of making a specially-designed service for a few wireless carriers in one region, in our view.”

The details from J.P. Morgan come as components claimed to be from an upgraded iPhone 4 continue to surface. Their existence stands in contrast to third-party cases that suggest Apple will release a device with a completely different form factor for its fifth-generation iPhone.

Last week, The New York Times weighed in by claiming that Apple is “just weeks away” from announcing an iPhone 5 with a “fairly different” design. The next iPhone is expected to sport an 8-megapixel camera and be powered by the same A5 processor found in the iPad 2.

Moskowitz sees Apple adding new carriers when it upgrades its iPhone lineup, setting the company up for a “potential big bang” in terms of sales. He sees China Telecom, Sprint and T-Mobile as the most likely carriers to partner with Apple in the immediate future.

Last week, Moskowitz said in a separate note that he does not expect Apple to release a third-generation iPad this year. He said the company has prototypes for the device already circling in its supply chain, but Apple is in “no rush” to release the device as the market struggles to compete with the iPad 2.

By AppleInsider Staff

Published: 08:14 AM EST (05:14 AM PST)

Apple has two major retail openings overseas planned for this week in Shanghai and Hong Kong, as the company also launched online stores in the Czech Republic, Hungary, Poland, and United Arab Emirates.

Retail stores

Apple has confirmed that its new Hong Kong store at IFC Mall will open this Saturday, Sept. 24, at 9 a.m. That confirms an earlier report indicating the store would open this month.

The company began hyping the debut with red signs posted around the mall that read “Apple Store, ifc mall. The new Center of Central.”

Hong Kong’s International Finance Center is a waterfront commercial development in the city’s Central District. The on-site mall is a four-story shopping center with more than 200 stores found within.

Construction on the store began in June, when the two-story storefront was covered and the mall promised a “new destination” would open in the fourth quarter of 2011. Reports suggested Apple planned to spend more than $20 million on construction alone.

After Apple officially announced the new Hong Kong store’s opening date, it also unveiled the new storefront for passersby at the IFC Mall. One AppleInsider reader passed along photos of the location that can now be seen by mallgoers.

In addition, Apple also announced on Monday that its store in Shanghai’s Nanjing East will open a day earlier, this Friday at 9 a.m. Revealed back in February it will be the company’s third store in Shanghai, joining two in Beijing.

The store will be Apple’s biggest retail operation yet in China, a country that has become a crucial part of the iPhone maker’s business. Last quarter Apple saw its revenue in China grow six times to reach $3.8 billion, and executives have said they believe they are barely “scratching the surface” of the market in China.

Online stores

As highlighted by MacRumors, Apple this week launched new online stores specific to the nations of the Czech Republic, Hungary, Poland, and United Arab Emirates. Designed just like Apple’s existing online stores elsewhere in the world, they offer localized prices and languages for customers looking to buy hot-selling products like the iPhone and iPad.

Apple’s expansion into four more countries gives the Cupertino, Calif., company a total of 37 different online stores tailored for individual nations.

By Josh Ong

Published: 11:50 PM EST (08:50 PM PST)

Apple organized a security task force in 2008 to address the growing problem of counterfeit iPods and iPhones in China, according to an electronic memo recently leaked by WikiLeaks.

CNN reports that Apple recruited members of a global security team from Pfizer after they were successful at disrupting counterfeit Viagra production in Asia.

According to the report, John Theriault, who worked as a special agent for the Federal Bureau of Investigation before serving as Pfizer’s security chief, heads Apple’s global security unit. Don Shruhan, who worked under Theriault at Pfizer, serves as a director on Apple’s security team in Hong Kong.

The leaked diplomatic cables, which were released by WikiLeaks last week, show that Shruhan told Beijing embassy officials that he was “afraid” of the amount of fake Apple products coming out of China and the company’s legal team’s inexperience in dealing with Chinese authorities. The documents on Apple’s fight against piracy were unclassified, though many were listed as “sensitive” and “not for Internet distribution.”

Indian officials discovered fake Apple products that had been shipped from China through Hong Kong, the cables also revealed.

“Shruhan said that low-profile retail raids are a good option for Apple, a company that wants to stay away from too much publicity surrounding this issue,” the publication noted the documents as saying. Theriault had briefed then CEO Steve Jobs on the plans in 2008.

The documents also detail Apple’s struggles to get the Chinese government to act against factories and vendors producing and selling counterfeit versions of its products. One cable from 2009 revealed that the government declined to shut down a facility making knockoff Apple laptops over concerns that it would threaten local jobs.

China came under the spotlight last month when an American blogger posted photos of an detailed knockoff Apple retail store. The attention prompted a wave of government inspections that forced several stores to close and numerous others to take down unauthorized Apple logos and signage.

However, Apple is also fighting knockoff goods in its home country. The company recently executed a warrant to raid an “Apple Story” store in New York City that was allegedly selling counterfeit Apple accessories. The Cupertino, Calif., iPhone maker has filed suit against the store, as well as 50 undisclosed individuals and businesses in an attempt to crack down on counterfeit products and accessories making their way into the U.S.

“Apple Story” store in Flushing, New York | Credit: Greg Autry

In February, port authorities in Los Angeles, Calif., confiscated more than $10 million in counterfeit goods and receipts, include a number of fake iPhones and iPods, which were said to have been shipped from Asia. “This was a well-funded operation, and the counterfeits looked very authentic,” said L.A. Port Police Chief Ron Boyd.

Source: L.A. Times

By Daniel Eran Dilger

Published: 03:53 PM EST (12:53 PM PST)

IDC reports that China has surpassed the US in demand for PCs, with the country consuming 18.5 million shipments worth $11.9 billion, compared to domestic shipments of 17.7 million units worth $11.7 billion.

The firm’s Worldwide Quarterly PC Tracker report states China now accounts for a 22% share of the global PC market, compared to 21 percent for the US.

“On a full year basis, IDC still expects the U.S. to remain the largest market in 2011, with 73.5 million units forecast to be shipped in the U.S. versus 72.4 million in China,” the firm reports.

“Similarly, holiday season buying in the U.S. will likely keep it ahead of China in the fourth quarter, especially as China’s market contracts after its third quarter summer promotions. IDC does not expect China to exceed the U.S. in full year shipments until 2012, when 85.2 million units are forecast to be shipped in China and 76.6 million units in the U.S.”

The firm labels its China figures as PRC (People’s Republic of China), suggesting that those sales only relate to mainland China and not the “Greater China” region that includes Taiwan and Hong Kong.

The report cites Kitty Fok, IDC’s vice president for Greater China research, as saying “the Chinese government’s 12th Five-Year Plan should help large enterprises in various infrastructure verticals to continue to move along, not to mention of course the ongoing efforts to increase consumer penetration in lower-tier cities,” suggesting that the number pertains to the PRC itself, despite IDC having a “Greater China Research” group.

IDC’s figures do not include the iPad, but do include netbooks and other portable computers. That excludes 9.25 million Apple devices sold the June quarter, equivalent to nearly half of the PC market in China.