China coronavirus shows how much Apple still depends on iPhone

Apple’s earnings warning due to the China coronavirus affecting iPhone production is an unfortunate reminder that, for all of its work to change investor perceptions over the past few years, working to remove the “hardware company” valuation discount, Apple remains “the iPhone company” in the eyes of some.

Alex Webb for Bloomberg:

China coronavirus Apple iPhone. Leaks purport a Navy Blue iPhone 12 Pro
Leaks purport a Navy Blue iPhone 12 Pro
For much of its six-year reign as the world’s biggest company by market capitalization through to the end of 2018, Apple was actually less valuable than Google parent Alphabet Inc. and Facebook Inc. on one crucial measure… Apple’s stock traded at just 14 times forward earnings. Alphabet and Facebook traded at 20 times and 24 times earnings respectively…

Apple, unhappy about its relative discount, has spent much of the past four years working to lose it by moving beyond hardware… Apple’s valuation has reacted commensurately. The stock is trading at 23 times forward earnings, more than Facebook’s 21 times and just shy of Alphabet’s 24 times…

That faith will have been shaken a little on Tuesday morning, after the company said revenue in the first three months of the year won’t hit the low end of its expected $63 billion to $67 billion range [due to the coronavirus outbreak]… a clear reminder that, for all its efforts, the iPhone is still Apple’s chief source of income.

MacDailyNews Take: This too shall pass. Apple’s services will continue to grow and the multi-year 5G iPhone super cycle looms, as the effects from the China coronavirus wane.


  1. “as the effects from the China coronavirus wane”

    Oh, so now MDN has become an expert in global pandemics. Sweet! Looking forward to managing my stock portfolio based on their outlooks (not). lol

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