Apple continued to earn big money in China despite intense competition from Chinese smartphone maker, Xiaomi, which has launched new low-cost phones.

Apple proved it's still one of the biggest mobile companies in the world when its profit rose to US$7.75 billion or 12 percent despite stiff competition in China. Its third quarter revenue report showed a 28 percent increase in China.

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Apple was able to sell some 35.2 million iPhones in three months' time.

Apple CEO Tim Cook said Apple's performance in the Chinese market was "honestly surprising" since they haven't done as well in the U.S. and European markets.

Cook said that iPhone sales in mainland China rose 48 percent compared to last year. He added that sales of the iPad and Mac also improved, rising to 51 percent and 39 percent, respectively.

Reports have suggested that Apple might face a crisis in China because of Chinese government support for Chinese makers of mobile devices but Apple's revenues seem to show that the California based mobile company is still at the top of its game.

Smartphone analyst Canalys ranked Apple as the fourth highest selling smartphone in China but was outsold by 4-year-old company Xiaomi.

Cook said even they were surprised by Apple's performance in China, which exceeded their expectations.

"We thought it would be strong, but it well went past what we thought. The unit growth was really off the charts across the board," Cook said.

Because of a stream of Chinese mobile product launches, Apple will have to keep making innovative products to remain as one of the world's leading mobile and gadget producers.

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