Apple's revenue in the Chinese market in 2023 will reach a staggering 40 billion yuan. Much of this revenue comes from what is humorously referred to as the "Apple tax," a large share of Apple's revenue from app developers and digital content producers. Globally, Apple has the highest percentage of claims.
Taking a closer look at Apple's financial report, we can see that in fiscal year 2023, Apple's total revenue reached a staggering $383.3 billion, of which the services business generated $85.2 billion, accounting for 22% of the total revenue. A striking statistic is that the profit margin of hardware products, including iPhones and iPads, is 36.5%, while the profit margin of the service business is as high as 70.8%, which is nearly twice that of its hardware products.
The importance of the Chinese market to Apple is not ordinary, and it is one of the top three sources of profit in the world. But surprisingly, despite this, the Chinese market has become an exception, and Apple has not given the Chinese market any special tax incentives. In China, Apple rates 30 percent for so-called "standard companies" and 15 percent for small businesses. In other countries and regions, such as the United States, the European Union and South Korea, their tax rates are lower than those in China.
The "Apple tax" controversy around the world has attracted widespread attention, especially around 2021, when antitrust investigations into Apple from outside the United States forced Apple to fine-tune its fee policy. Surprisingly, however, Apple consumers don't seem to be much offended despite such a high score. Possible reasons include market demand for Apple products, brand loyalty, user experience, and other factors. However, as time goes by, the discussion and reflection on the "Apple tax" is still ongoing, which is undoubtedly a big challenge for Apple's global business strategy.