Eddy Cue

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Research

How many Apple users are in China?

Greater China (GC) is a specific reporting segment for Apple, encompassing Mainland China, Taiwan, Hong Kong, and Macao, with a combined population nearing 1.5 billion. This region is not just a significant contributor to Apple's revenue—accounting for 18% of net sales in Q4 2025—but also a dynamic landscape of technological adoption and consumer behavior. The smartphone user base in GC has surged from 690 million in 2016 to nearly a billion in 2025, with projections reaching 1.08 billion by 2029.

The iOS ecosystem within GC exhibits varied dynamics across its constituent regions. While Macao maintains a steady iOS share of around 60%, Mainland China and Taiwan show different trajectories. Analyzing these trends through mobile OS share data reveals iOS's ascent, suggesting robust potential for further penetration and user engagement. As Apple navigates this complex market, understanding GC's historical growth patterns and future prospects is crucial for capitalizing on emerging opportunities and sustaining its competitive edge. →

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Nota Bene

Apple #1 phone vendor in Europe → Apple leads Q4 2025 with a 7% YoY shipment rise driven by iPhone 17, while Samsung follows with 4% growth; Xiaomi faces a 6% decline amid shifting regional dynamics. →

Are Solid State Batteries Finally Here? → Donut Lab has partnered with VTT for independent battery tests, with full reports and videos to follow. →

iPhone becomes India’s top single export item → In 2025, Apple's iPhone exports from India, driven by Tata and Foxconn plants and a robust supply chain, reached $23 billion, making smartphones the top export category. →

Apple’s App Store growth is reaccelerating → Apple's Services, beyond just the App Store, are poised for robust growth, driven by global market expansion and strong hardware demand. →

Here’s why demand for Macs has spiked → Mac lead times have surged to multi-year highs due to increased demand, notably impacting models like Mac Studio, MacBook Pro M4, and Mac Mini. →

A resource for AVP news → "AVP VIP offers a weekly, ad-free digest of tech news and insights, accessible to Asymco One members." →

Apple to Start Assembling Mac mini in the United States This Year → Apple revamps the Mac mini with M4 chips and boosts U.S. chip sourcing, starting at $599 without display, amid rising demand. →

Apple Pay Aiming Launch in India This Year → Apple Pay aims to launch in India by late 2026, pending regulatory approvals and fee negotiations with card issuers. →

iPhone and iPad approved to handle classified NATO information → Apple's iPhone and iPad achieve unprecedented NATO compliance, marking a pivotal shift in secure mobile technology acceptance. →

Eddy Cue says Brazil is Apple TV’s second-largest market, talks Netflix-Warner merger → In an interview, Apple's Eddy Cue highlighted Brazil as the second-largest and fastest-growing market for Apple TV subscribers, while noting potential impacts from proposed streaming regulations and a possible Netflix-Warner deal. Specific user and device numbers were not disclosed. →

DRAM Shortage Will Cause ‘Seismic Shift’ in Smartphone Market, But Apple Will Be Less Affected → A looming DRAM shortage due to AI demand will slash smartphone sales by 13% in 2026, forcing a market shift towards pricier devices, with relief not expected until mid-2027. →

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Eddy Cue seems like a nice guy. I can't say that for sure as I've never met him, but he seems to be amiable enough. Maybe it's because he has a seat on Ferrari's board of directors. Maybe it's because he enjoys dancing.

Or maybe it's because he's in charge of the only real "division" at Apple. All the other senior managers have functional roles. Eddy has a bona-fide business unit called Services.

Services is Apple's division of many things. It has the iTunes stores (Music, Video, Apps and iBooks). It has Software with consumer bundles like iWork and iLife and Pro tools like Aperture, Final Cut Pro and Logic Pro. It still has OS X as a product, though revenues are pretty low as updates are now free. It also includes Services with iCloud, Apple Music and Applecare.

These things are not iPhones or iPads but they are many and all together they form a modest little unit. I say modest because not much is said about it. When seen in contrast to the other Apple product lines, it's hard to be impressed. In the graph below it's the purple area.

Apple does not help much. Occasionally  Apple offers updates on iTunes/Services using various (rarely the same) metrics. For example, in early August, Eddy Cue offered an update during an interview with USA Today on Apple Music relating how many users there were one month after the service started (11 million).  It was worth a few headlines.

However he also noted in passing that the App store did $1.7 billion in transactions during July. If you convert that to a yearly run-rate it comes out to about $20 billion/yr. Digging through previous announcements, the equivalent figure for 2014 was about $13.7 billion. Nice growth.

But is $20 billion of "transactions" of any significance? It's not even a figure that Apple reports as revenue. For apps, Apple reports only the 30% fee as revenues so 70% of that transaction value passes through to developers and is therefore not part of its statement of accounts. ((From SEC filings: For third-party applications sold through the App Store and Mac App Store and certain digital content sold through the iTunes Store, the Company does not determine the selling price of the products and is not the primary obligor to the customer. Therefore, the Company accounts for such sales on a net basis by recognizing in net sales only the commission it retains from each sale. The portion of the gross amount billed to customers that is remitted by the Company to third-party app developers and certain digital content owners is not reflected in the Company’s Consolidated Statements of Operations.))

However perhaps we should consider the figure in some way. It represents transactions in an economic sense--the amount people spend on apps. It's therefore comparable with what people spend on other forms of entertainment. Movies for example.

The following graph shows the spending on apps within the iTunes App Store ((note that this does not include Google's Play Store whose transaction values are not public and is therefore not a gauge of all apps.)) as well as spending on other forms of iTunes stores as well as Services. It also shows how all the services compare with box office revenues from movies. Both the US and World-wide. And how these figures changed over the few years that the App Store has been in existence. The individual service line items are shown in the graph on the left and the stacked totals are on the right.

Note that already last year App Store Billings overtook US Box Office gross revenues and that Services a whole overtook Global Box Office gross revenues. It's not likely to happen this year but next year Apple's Apps will almost certainly overtake global Box Office in revenues.

This contrast with movies gives some perspective on the creation of a new market. Apps did not exist as a medium in 2007. But, together with Android apps, apps are likely to have already overtaken revenues from an industry that is a century old. And not just any industry. Hollywood represents more than an economic power, it has a cultural power affecting perceptions and political opinion. And although universally envied, it has not been successfully replicated.

So having created this market and becoming bigger than Hollywood, and grossing more than what 90 countries produce, Apple's Services not something that is interesting to many who think about technology or even to many who think about Apple.

Which is why I think Eddy's such a nice guy. No matter how little attention is paid to his economic empire, he always seems to be in a good mood. Maybe he knows something we don't.

The Re/Code conference begins this week, and Apple executives Eddy Cue and Craig Federighi will be answering questions from Kara Swisher and Walt Mossberg.

Here are some questions I hope they ask:

For Eddy Cue:

1. Why is there no app store for Apple TV? Even though the product is running essentially the same hardware and software as the iPhone and iPad and iPod touch and even though it connects to the iTunes stores, there is no option for developers to build apps for it or for consumers to use their TVs to run iOS apps. I might add that it’s been seven years since the platform launched and that’s a long time to wait.
2. As Amazon has been granted a monopoly on the distribution of ebooks by the US federal government, why not compete by selling ebooks as apps? Apps were used as ebook containers well before the iBookstore launched and there were tens of thousands of “book apps”. Why not encourage authors and publishers to build apps by offering tools which make it easy to do so? I might add that if you do this for authors, why not do it for musicians and video producers? Why have separate stores for different media when they are all just content?
3. YouTube is becoming the TV of choice for millions. Before it becomes that choice for billions, what are you doing to encourage user-generated video content distribution through your ecosystem?
4. Apple’s Services revenues are growing remarkably quickly. The number of users is over 800 million. Do you see an opportunity for services to become a more independent business at Apple? In other words, why not bring iTunes to Android?

For Craig Federighi:

1. Marc Andreessen uses the phrase “Software is Eating the World” to describe the disruption that software-enabled businesses are having on those who don’t depend on software. You are the head of software at Apple; what’s on your plate? In other words, what do you see the opportunity for software at Apple beyond enabling device sales? I might add that although you are leading Software Engineering at Apple, Software and Services are part of Eddy’s organization. Does this separation make sense?
2. It’s likely that iOS will be used by more people than Windows in the near future. What do you see as the obstacles to iOS replacing Windows for what most business users use daily?
3. If you believe that iOS can replace Windows (at least in some tasks), do you think the iPad will ever replace the Mac?

This was originally posted on LinkedIn on May 28th.