24/7 Wall St. Insights
- For the Apple Inc. (NASDAQ: AAPL) iPhone 16 launch to succeed, sales must be strong in China.
- However, the iPhone faces stiff competition there.
- Also: Discover the Next Nvidia.
Apple Inc. (NASDAQ: AAPL) will release the iPhone 16 this month. Its AI-driven iOS 18 will follow a few days later. The expectation is that between them that will cause a huge upgrade cycle as people turn in their older iPhones for what is supposed to be a new and remarkable model. Of course, it is not that simple. For the iPhone launch to be a success, sales must be strong in China. It remains the largest smartphone market in the world by far.
As CNN pointed out, “Apple also needs to convince investors that it hasn’t fallen behind in the AI arms race, as rivals have already released similar features with the new technology.” The challenge has already begun in China. Huge Huawei, among China’s local smartphone companies, recently released a smartphone called the Mate XT. It is a foldable phone, which the iPhone is not. It has its own AI features. Soon enough, the market will show if folding is an attraction. According to CNBC, consumers have pre-ordered 2.7 million units of the new Huawei model.
It is worth remembering that Apple’s stock took a beating earlier this year. One report showed iPhone sales dropped 24% in the first six weeks of 2024, compared to the year before. Strong Huawei sales reportedly were the primary cause.
Apple’s financial results have shown a struggle in China so far this year. For the first nine months of Apple’s fiscal year, Greater China revenue dropped from $57.5 billion in the same period the year before to $52.9 billion.
Chinese consumers own about 950 million smartphones. In the United States, the figure is about a third of that. Without China, the iPhone 16 cannot be a huge hit.
Is Apple Stock Appetizing Once Again?
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
