What's Up With Apple: Hyundai Deal Lives, Lower iPhone 12 Demand, an Apple Store Closes

The journalistic search for Apple Inc. (NASDAQ: AAPL) to find a manufacturing partner for a rumored Apple car has come full circle. South Korea’s Chosun Biz news outlet reported Friday morning that Apple and Hyundai Motor Group talks have not been completely scrapped. According to Chosun Biz’s source, “Even if the negotiations on electric vehicles fail, there are many items that can be negotiated in other fields, so we are still optimistic about the possibility of a partnership between the two sides.”

According to the report, Apple and Hyundai’s Kia division last year signed a memorandum of understanding “to promote collaboration in eight areas, including electric vehicles.” The unnamed source noted that while negotiations for an Apple Car are “experiencing difficulties, they have not completely collapsed.”

The report goes on to say that Apple and Kia have “similar strategic goals,” including last-mile services combined with the Internet of Things, autonomous vehicles and robot technology. While the term “last mile” usually refers to a delivery service that makes short trips from a warehouse directly to a business customer, in this case the term includes a short trip following a longer commute by another form of transportation (think scooters from the subway stop).

JPMorgan analyst Samik Chatterjee told clients in a note Thursday that demand for the iPhone 12 is slipping but that Apple’s smartphone shipments will still increase year over year in 2021. According to a report at AppleInsider, Chatterjee has lowered his sales forecast for the iPhone 12 series from 236 million to 230 million. The latter number represents a sales increase of 13%.

Chatterjee is among many analysts who believe Apple will discontinue the iPhone 12 mini in the second quarter due to weak sales of the small device. He also expects the company will make a “major cut” to shipments of the 12 Pro.

Weak consumer spending in China, along with a return to a more usual demand trend following the introduction of Apple’s 5G phones, are responsible for the lower forecast. Chatterjee has cut his estimate of March quarter shipments from 55 million to 52 million and raised his June quarter estimate from 36 million to 42 million units.

The lowered forecast is likely to cause a change of only about 1% to JPMorgan’s full-year earnings per share estimate for Apple, knocking the figure down from $4.65 to $4.60. Chatterjee sees the recent drop in Apple’s share price as a “broad acknowledgment of near-term underperformance” and that now investors’ attention should be focused on acquiring more Apple shares at these lower prices. Chatterjee has maintained his $150 price target on Apple stock.

Apple on Thursday announced that it is closing its retail store in the MacArthur Center mall in Norfolk, Virginia, after more than 14 years of operation. No specific date for the closing was given, nor did Apple give a reason for the store’s closure,

MacRumors reported that the Norfolk mall has suffered “several safety issues” in recent years including multiple active shooter events. Nordstrom, Williams-Sonoma, Banana Republic, J. Crew, Fossil, Pottery Barn and other well-known retailers already have abandoned MacArthur Center.

Apple said it has offered all the store’s employees other positions with the company and that the Apple Store in Lynnhaven Mall in nearby Virginia Beach will remain open to serve customers.