With investor faith wavering in Apple over demand in China, a market research firm is offering some numbers that may bolster confidence.
China has finally taken the top spot in Apple App Store downloads, according to App Annie.
The Chinese market has trailed the U.S. in Apple App Store downloads since 2011, but that changed last quarter, stated the market research firm in its report.
China's App Store downloads increased by about 30 percent, year over year, in the first quarter of 2015, bringing in $1.7 billion in transactions in July alone. Meanwhile, U.S. consumption was relatively flat. The U.S., now in second, is followed by Japan in App Store downloads.
"China's move past the United States for iOS downloads in Q1 2015 was possible thanks to large growth in the adoption of iOS devices, rather than an increase in downloads per device," stated the report.
Mobile games drew the most App Store downloads in China, during the first quarter, but the entertainment and lifestyle categories were also rising. Some of China's biggest content providers and search services have been proactive in cultivating and meeting demand.
"Over the past few years, these services evolved from YouTube-like user-generated content video platforms to Netflix-like providers of professional shows," the report claimed. "They have successfully attracted audiences from traditional broadcasting TVs by offering the content on omni-platforms including desktop, mobile, settop boxes and digital TV."
That premium content strategy also includes acquiring the licenses to broadcast foreign content, including shows such as House of Cards and movies such as Interstellar.
While things in China may be a bit better than some investors believed, the company still will have to continue to prove itself as it evolves its brand. After Apple's latest earnings report failed to satisfy the bulls, wrote Daniel Ives, Wall Street analyst at FBR Capital, people will need more inspiration from the latest line of Apple products.
"While China impressively grew 100%+ and remains the main fuel in the company's engine, now Apple becomes a bit of a 'prove me' stock, as the Street needs to feel comfortable that the iPhone 6/6 Plus growth story is alive and well," stated Ives.
For Sundeep Bajikar, Wall Street analyst at Jefferies, Apple has to take its next evolutionary step in order to sustain its brand power in China.
"We believe Apple is trying to accelerate its transition from a tech brand to a hybrid tech-luxury-fashion brand, and the process may require the introduction of new product categories, as well as further changes in retail/merchandising," stated Bajikar.
