Analyst: Low-priced iPhone SE and China discounts to cushion Apple

China, which accounts for roughly 15% of Apple’s revenue, appears to be a rare bright spot for the company. Shareholders’ will be interested to get a picture of global demand when Apple reports second-quarter results on Thursday after market close. Consumer spending is expected to be muted as the COVID-19 pandemic has crippled economies, but Apple is better armed with the launch of its new lower-priced iPhone SE (2020) model, analysts said.

Apple China. Image: Apple logoJosh Horwitz for Reuters:

“Apple is better positioned than most to experience a rapid recovery in a post COVID world,” Evercore analyst Amit Daryanani said in a research note. “We see demand as pushed out, not canceled.” He added that the launch of the $399 iPhone SE suggested that Apple’s supply chain was getting back on its feet after weeks of shutdown earlier this year… On the other hand, Chinese brands such as Oppo and Vivo who have steadily moved to offer high-end models to challenge iPhones, stand to lose marketshare as bargain hunters choose Apple.

Earlier this month, several online retailers in China slashed prices of the iPhone 11 by as much as 18% – a tactic Apple has used in the past to boost demand… Early data suggests that the Chinese smartphone market is recovering rapidly in the aftermath of the virus, and Apple has emerged relatively unscathed.

Sales of iPhones in China jumped 21% last month from a year earlier and more than three fold from February, government data showed, meaning March-quarter sales in the country were likely to have slipped just 1%.

MacDailyNews Take: We’ll know for sure on Thursday! Apple is slated to release Q220 results after market close on Thursday, April 30, 2020. We’ll have them for you as always right around 1:30pm PDT / 4:30pm EDT. Apple’s conference call to discuss Q220 results is scheduled to start right after that at 2:00pm PDT / 5:00pm EDT. We’ll cover the conference call with live notes as usual, too. Just check our home page around 1:45pm PDT / 4:45pm EDT on Thursday, April 30, 2020 for that link.

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