NEW YORK (TheStreet) -- Despite a contraction in the Chinese smartphone market so far this year, the downturn in sales is not expected to have a major impact on China becoming Apple (AAPL) biggest revenue region in the near term, according to a report from FBR analyst Daniel Ives.
On Monday, Ives said Apple "is poised to capitalize on what we estimate is over a $150 billion [total market] from China smartphone shipments over the next few years," with particular strength expected from the recent releases of the iPhone 6, the iPhone 6 Plus, apps from Apple's App Store and anticipated sales of the Apple Watch. Ives maintained his outperform rating with a $185 price target.
Ives also noted that Apple's 71% growth in China revenue during its fiscal second-quarter growth, to $16.8 billion, suggests China will overtake the Americas as the company's top geographic revenue area during Apple's 2017 fiscal year. During the first quarter of this year, sales from the Americas made up $21.3 million of Apple's total revenue of $58 million.
Sales of the iPhone are at the heart of Apple's current and future growth in China, the analyst noted.
"The mobile market in China has been a game changer for Apple," Ives said. China "will likely be the main fuel in Apple's growth engine for years to come on the heels of smartphone and wearables penetration."