Tim Cook, on iPhone sales in China1:
[iPhone] was up over 70% year on year […] I’ve never seen as many people coming into the middle class as they are in China. And that’s where the bulk of our sales are going.
So how big is China’s middle class? What sort of growth wave is Apple riding?
Let’s take a look. In the graphic below2, let’s focus on the orange parts: In 2015, 80 million urban households (~35% of urban households) are considered “Upper middle class” or “Affluent”. (Income levels may not correspond to your country, but those are the levels required in China.) By 2025, 230 million urban households (or 67%) will be at that level. These are the consumers that can afford iPhones (and Apple Watches), and they’re the ones Apple wants to satisfy.
______
1. Tiernan Ray’s transcript of Apple’s April 28, 2015 earnings call.
2. Mobile Forward estimates based on work from several McKinsey analyses:
Yuval Atsmon and Max Magni. “Meet the Chinese consumer of 2020”, McKinsey Quarterly, March 2012.
Dominic Barton, Yougang Chen, and Amy Jin. “Mapping China’s middle class”, McKinsey Quarterly, June 2013.
Gordon Orr. “Preparing For China’s Middle Class Challenge (Part 1)”, LinkedIn, March 2014.
