It seems that some people will buy Apple shares no matter what happens. The company’s share price managed to strengthen by 0.2% yesterday despite what can only be described as catastrophic news from China.
Last week, it became known that Credit Suisse data points to a 35.4% drop in iPhone sales in November. This plunge took place against the background of a moderately growing smartphone market in that part of the world.
It followed a 10.3% drop in October. Yesterday, things got worse when yet another analyst confirmed that channel checks indicate a similar trend. On Tuesday, Rosenblatt analyst Jun Zhang announced that iPhone sales in China had tumbled by around 30% on an annual basis last month.
While it’s always difficult to predict future trends, Zhang believes that the emergence of 5G phones in China (while Apple still has not a single 5G phone to offer) will place additional pressure on iPhone sales going forward.
Zhang kept his sell rating on Apple stocks unchanged, and his price target remains at $150. Taking into account the fact that Apple shares are selling for around $280 at present, this is a very dark view indeed.
Zhang is most likely the realistic one here: the current Apple stock price simply does not take into account the latest disastrous sales news from China.
Granted, iPhone demand in the US seem to remain fairly strong, but China will most likely turn out to be a major drag on the firm’s December sales.
Apple escaped an even bigger disaster recently when tariffs that were supposed to become effective on 15th December were postponed.
These would have hit electronic devices such as smartphones badly. Apple would have had to either absorb the cost, which would have negatively impacted on profits, or increase its already high prices.