Apple (NASDAQ: AAPL) stock fell 3% on Tuesday following reports of sluggish iPhone sales in China.
Apple Inc. (AAPL) faced a significant setback in China as market research firm Counterpoint Research reported a 24% decline in iPhone unit sales during the initial six weeks of 2024 compared to last year. In contrast, sales for China-based rival Huawei surged by a striking 64%, according to Counterpoint’s findings. The report also highlighted an overall 7% dip in smartphone sales across China during the same period.
Mengmeng Zhang, an analyst at Counterpoint, attributed Apple’s dwindling sales in China to fierce competition in the premium smartphone segment from Huawei’s Mate 60 series. Zhang also pointed out that Apple encountered pressure in the midrange handset market due to aggressive pricing strategies by domestic competitors such as Oppo, Vivo, and Xiaomi.
The news of declining iPhone sales in China coincided with Foxconn, the Taiwan-based contract manufacturer responsible for assembling iPhones, reporting a 12% drop in February sales compared to the previous year, indicating a slowdown in Apple product sales.
Apple Stock Sentiment: “Dismal”
Daniel Ives, an analyst at Wedbush Securities, characterized the sentiment surrounding Apple stock as “dismal,” noting the company’s perceived lag in the burgeoning AI revolution captivating Wall Street. However, Ives reiterated an outperform rating on Apple stock, setting a 12-month price target of $250 in a client note.
The tech giant last week dumped its autonomous electric car project to shift its focus to artificial intelligence (AI). The company reportedly invested over $10 billion into the Apple car project before halting it.
Ives foresees a potential improvement in sentiment around Apple stock post-WWDC in June, with a focus on anticipated AI discussions.
Ives said,
“Right now, the data points are not roses and rainbows for Apple, and headline risk remains in the name.”
He added,
“However, our view is all about navigating this next 1-2 quarters and getting on to the other side of easier comps, AI announcement at WWDC, the stronger upgrade cycle for iPhone 16, and the monetization opportunity of the golden installed base (of iPhone owners).”
Apple (NASDAQ: AAPL) Stock Price Action
AAPL stock dropped 2.84% to close at $170.12 on Tuesday. The traders had exchanged hands with 93,954,976 (93.95 million) shares compared to the average daily trading volume of 57.02 million.
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