Wedbush Securities analyst Daniel Ives, like Citi analysts, believes the market is overreacting to the news that China has in recent weeks widened existing curbs (extent unknown) on the use of iPhones by state employees.
Subrat Patnaik for Bloomberg News:
Apple Inc. shares tumbled in premarket trading Thursday, on track to wipe out $194 billion of market value in just two days, as China plans to expand a ban on the use of iPhones to government-backed agencies and state companies.
Wedbush Securities’ Daniel Ives think the effect of an “iPhone ban is way overblown” as it would affect less than 500,000 iPhones of the roughly 45 million he expects to be sold in the country over the next 12 months.
“Despite the loud noise Apple has seen massive share gains in China smartphone market,” Ives, who has an overweight rating on the stock, wrote in a note.
MacDailyNews Take: Again, as always, take the irrational AAPL discounts when they arise.
Apple products are status symbols in China and they will remain that way for a very long time.
Enjoy your dog-slow, ass-ugly iPhone knockoffs, CCP gubmint drones!
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Of course Dan Ives of Wedbush thinks it’s overblown – since it runs counter to his thesis that Apple will supposedly see a massive “super cycle” with the iPhone 15 to justify his company’s near street high forecast for AAPL shares.
Personally, I don’t think the reaction is overblown. AAPL and TSLA are uniquely vulnerable because of how much of their revenue is derived from China. In the case of AAPL I think it’s almost 20%. Combine this exposure with the continued tit-for-tat between Washington and Beijing and one can assume that these companies will eventually suffer. But even without any China government threats, sales in China are going to go down due to the deteriorating economic conditions there.
No doubt Xi has and uses daily his own personal iPhone. His iPhone is likely the Red model. One can only guess why he prefers Red. 🤣
The man has been optimistic about Apple, and therefore right, for about fifteen straight years, so his opinion about this is to be valued.
MDN take is on the money. Yes, this doesn’t mean big loss of revenue in the near term, but the evil awful ccp just turned up the heat in cooking the frog in its hot tub. If you don’t see that, you’re dismissed from the adult’s table.
China is a communist humanity destroying s’ hole, and apple should have diversified long ago. Apple should make 10% of products in the USA, 20% in Europe. 20% in South America. 15% in Japan and South Korea. And maybe 35% split between china and India.
Cook failed at business 101. Diversification of markets. Yes Steve hired cook to bring manufacturing to china, but not only bring all its manufacturing eggs into one hostile communist hellhole. And china was far different when jobs pushed for entry there at behest of cook, the biggest operational failure in business history.
Apple needs a master chef, unfortunately and instead, they have a lousy cook.