Just ahead of the Lunar New Year festival, the Chinese government curbed travel in late January affecting iPhone sales in the country. Those restrictions stayed largely in place through most of the month of February. In addition, Apple’s branded stores in China were shut for at least two weeks in February as fears over the coronavirus outbreak mounted.
In February, Apple’s sales of iPhone amounted to fewer than 500,000 units in China, according to Chinese government data released on Monday, as the COVID-19 coronavirus outbreak halved demand in the smartphone market as a whole.
Apple’s sales of iPhones are considerably down in China for the last quarter, according to Daniel Ives from Wedbush, but Apple’s ability to bring the supply chain back to normal is of bigger importance to investors.
“While this is a very nervous time for consumers, companies, investors, etc., we caution that Chinese demand in the March quarter is not the trend, but a ‘shock event’ that we believe will be shortlived as normalized iPhone demand trends start to take hold in 2H in China and across the globe,” Ives writes. “Cook and Apple when taking March guidance off the table last month foreshadowed these types of numbers and speaks to the near-term damage done in China over the last six weeks due to the coronavirus and its impact on consumer demand across the board,” Ives continued. “Now all eyes of the Street are around normalizing the supply chain by late April/early May and trying to better understand the demand trajectory in China over the coming quarters.”
ves doesn’t see any delay more than a few weeks for the 5G “iPhone 12” when compared to previous years’ launch windows, and a recovery of iPhone demand in China in the June and September quarters with only limited demand destruction… Given the core premise of a 5G “super cycle,” Ives is maintaining a $400 price target for Apple.
MacDailyNews Take: Again, with this news of Apple’s February iPhone sales in China, along with an obscene amount of coronavirus hysterics amplified by the media/social media echo chamber, get ready for AAPL’s discount sale, just ahead of the multi-year 5G iPhone super cycle, to deepen. Smart investors will take advantage.