Why Carl Icahn is wrong about Apple and China

“Carl Icahn has acknowledged selling off his Apple holdings and has pointed to ‘China’s attitude’ towards Apple as his principal concern,” Mark Hibben writes for Seeking Alpha. “While Icahn regards the Chinese government as having unlimited power, in fact, the government is severely limited by economic realities, globalization, and its obligations as a member of the World Trade Organization.”

“Carl Icahn has kicked off for the Summer of 2016 a new Chinese Bogeyman, that of the pernicious Chinese Government,” Hibben writes. “Icahn said, ‘You worry a little bit – and maybe more than a little – about China’s attitude… [The Chinese government could] come in and make it very difficult for Apple to sell there… You can do pretty much what you want there.'”

“It’s obvious that this will be the new thesis that drives the stock down during the summer,” Hibben writes. “Besides formal trade requirements, China is highly dependent on its trade relationships with countries such as the US. Apple is the premier example. Apple’s manufacturing partner, Hon Hai Precision (Foxconn) is the largest private employer in China, with 1.4 million workers. As I’ve pointed out, Foxconn derives between 60-70% of its revenue from Apple, depending on the time of year. This makes Apple indirectly one of the largest private employers in China… China has more to lose than gain by blocking Apple.”

Much more in the full article – recommendedhere.

MacDailyNews Take: As we wrote on Monday:

China has a lot more to lose than they have to gain by “slamming the door on Apple.”

Carl Icahn out of Apple over worries about China’s ‘dictatorship’ government – April 29, 2016
Apple stock falls as Carl Icahn dumps all of his shares – April 29, 2016
Carl Icahn dumps all of his Apple shares; stock drops – April 28, 2016
Apple reports earnings miss in Q216 – April 26, 2016
China could slam door on Apple, says top global risk expert – April 25, 2016
China’s increasing censorship hits Apple, but Apple might punch back – April 22, 2016
China shutters Apple’s online book and movie services – April 22, 2016
Apple CEO Tim Cook joins Robert F. Kennedy Human Rights’ board of directors – April 6, 2016


  1. MDN your take is wrong. China has the US and many other countries by the ba–s. Nowhere else on the planet other than China can iPhones be assembled in the quantity apple requires. The Chinese government knows it. They can jerk Apple around with iTunes and any kind of service all they want. The United States is just one country that is afraid to deal with anything in China and this is the problem with our government today

    1. If the Chinese government can jerk Apple around ( “with iTunes and any kind of service they want) why don’t they use this almighty leverage to get higher wages for Chinese workers? Why don’t they just kick Apple out altogether and allow Chinese copycats to operate the factories to make cheap Apple knock offs? Lots of other countries with potential for low wage workers and a desire to build infrastructure to build their economies. Isn’t it a mutual balance?

        1. Exactly, what would getting higher wages for Apple product assemblers do for the country as a whole? Nothing.

          Which is why it is Apple pushing for higher wages for assemblers.

          The Chinese government is going to optimize their use of leverage for the whole country as they see it, not a few workers.

        1. Wrong, wrong, wrong. All Apple products are both singular and plural, like fish, or deer.

          Correct examples:

          “I own two iPad tablet devices.”

          “I like those new Smart Keyboard typewriter devices.”

          “Would you like to buy one of our new iPhone cellular telephones?”

          1. Are you making a bad attempt at some kind of obscure geek joke?

            If you are serious, who on the continent, besides you, has ever said, “I own two iPad tablet devices”?

            What are you talking about?

            One – one iPad.
            Two – two iPads.
            Three – three creepy crawly monsters.
            (The Count)

    2. The SE is sold out in UK US China Aus…2-4 week waits…even with FoxCom having a 500,000 to 1 Million A DAY build capability…Android switchers and new clients feed IOS services

  2. So Karl is selling off “China’s attitude” towards Apple as his principal concern. Smart move Karl, after all who would want to business with company that does business in a country run by a government that tortures people, holds them indefinitely while denying them justice, does massive spying on people around the world, invades another sovereign nation with no consideration of the tenets of the UN. To top it all off, they have a wall. A WALL Karl. I mean what kind of scum bottom feeding country would even thing of putting a wall between then and their neighbor? Then again it’s not all bad, at least they had the common decency to pay for it themselves. I mean can you imagine if they tried to get their neighbors to pay for it? I can’t imagine a country even sinking to those depths.

    Yes Karl you’ve done well calling that kettle black.

    /shjtt tag (story, humor, joke, tall tale).

  3. Who cares whether Carl Icahn is right or not? The big investors are jumping off Apple like rats abandon a sinking ship. The only thing that matters is putting your money where you believe it’s going to get you something. It appears most big investors know they’re not going to get anything from Apple when there are so many other much more generous companies around. Apple sunk last year and it’s sinking further this year. That’s definitely bad news for anyone who wants decent returns for their hard-earned money. It appears as if Apple is deliberately trying to drive the big investors away in order to buy back their shares cheaply. If that’s Apple’s plan, they’re doing a great job of it. I have to laugh. As Apple’s EPS rises, the share price goes down further. Rather perverse if you ask me. Fundamentals mean absolutely nothing useful for shareholders. Potential growth and largest market share rules all.

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