“Apple shares have slid steadily amid tumultuous U.S. trade negotiations with China, as investors fear CEO Tim Cook’s warning earlier this year about iPhone sales in China may yet come true,” Michael Sheetz reports for CNBC. “Cook warned in January that a weakening economy in China would hit Apple financially. The company lowered its 2019 revenue forecast accordingly to $84 billion. Apple blamed a variety of factors for the lowered guidance but especially focused on slowing revenue ‘primarily in Greater China,’ saying getting overseas customers to upgrade to newer iPhones was ‘not as strong’ as Apple expected.”
“In response, Apple’s stock fell sharply in January. But in the months since, Apple’s stock roared back. At the beginning of May, Apple was up nearly 35% for the year,” Sheetz reports. “When Apple reported strong first quarter earnings at the end of April, Cook pointed to an uptick in the company’s China prospects as a main driver.”
“The CEO also told CNBC that part of the company’s strength in China was due to progress made by Trump’s administration in trade negotiations,” Sheetz reports. “‘I believe that the trade relationship — I don’t mean the tariff, I mean the tone — is much better today than it was in the November-December time frame. That affects consumer confidence in a positive way,’ Cook said on April 30.”
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MacDailyNews Take: As older iPhones are no longer supported by new versions of iOS and 5G iPhones make their debut in 2020, sales of iPhone – which has very high customer satisfaction – will be just fine in China and everywhere else. Of course, the U.S. and China will have a trade agreement in place by then, too.
I’m cognizant that in both the U.S. and China, there have been cases where everyone hasn’t benefited, where the benefit hasn’t been balanced. My belief is that one plus one equals three. The pie gets larger, working together. — Apple CEO Tim Cook, March 24, 2018
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