“In the last two years, Apple has rung up nearly $105B in revenue in Greater China — with a very large portion of those sales to new iPhone customers,” AAPL Tree writes for Medium. “So while these iPhone owners may not upgrade ‘for a while,’ they most certainly will, as Apple’s Services growth trends show, buy apps, iCloud services, AppleCare plans and Apple Music subscriptions.”
“So even when unit sales are cooling, the China iPhone user installed base (which grew 34% year-on-year ) continues to grow and spend apace,” AAPL Tree writes. “And since so many millions of customers were added in just the past 7–8 fiscal quarters (a ‘mere’ $60B in revenue could easily translate to around 90M iPhones sold), there’s a separate, ‘invisible’ demand curve, irrespective of hardware seasonality, demonstrating the strong health of the ‘Apple ecosystem’ in this revenue geography.”
AAPL Tree writes, “All of this data taken together, in my home gamer’s opinion, proves that Apple continues to be ascendant in Greater China and that if nothing else, Apple is more than capable of ‘biding its time,’ quite profitably, until the apparently quite satisfied and still-growing installed base in Greater China is ready for their next smartphone. Which will be, much more likely than not, another iPhone.”
Much more, including insightful graphs, in the full article here.
MacDailyNews Take: All together now: It’s the ecosystem, stupid!
But…but…but…
The analysists say Apple is doomed. Sell…sell…sell
Did I mention these analysist’s are deaf, really dumb, blind to all reason, and interested only in generating commissions?
Hey guys, there is more to Apple than AAPL
Some analysts see things as they are and ask why. I dream of higher returns and ask, “Why not?”
Not enough! No where near enough!
Big investors believe any company that doesn’t have huge amounts of future growth are basically not worth their effort and money. Amazon has target prices of $950 a share and eventually Amazon is going to pass Apple in market cap if that P/E of 300 remains. Facebook has target prices of $165 a share and no limitations of growth. Forget Alphabet. Even reaching the lowest analyst target prices will push that stock well past Apple in market cap with a P/E of 33.
What type of target prices is Apple getting? $115, $120 a share with a crappy P/E of 12 or 13. Apple shareholders are pretty much screwed as far as the analysts are concerned. Apple has to make far more revenue and profits than any other tech company around just to hold some meager value. As the other tech companies’ value continue to rapidly climb, all Apple will do is sputter and trade sideways thanks to Tim Cook. No big investors have any confidence in Tim Cook and that’s why Apple is the only profitable tech company which remains on the doomed list.
Your post was fine until you blamed everything on Tim Cook. That meme got old a couple of years ago…
Apple’s biggest risk with respect to China is political. The Chinese government could choose to impose roadblocks to Apple’s sales of hardware and services. The Chinese government could also enact (even more) policies that favor domestic companies competing with Apple. In the longer term, China’s objectives are clear – it wants to convert the most successful businesses into Chinese operations, then export them to other countries. And, in China, virtually any means are justified to achieve that end goal.
The more successful and profitable that Apple becomes in China, the more that Apple’s products and operations will be targeted. That is the biggest risk, both short term and long term. Examples of that government control are already available in terms of suspension of media distribution by Apple.