Here’s Why You Should Stop Worrying About Apple in China
You may have heard…
China’s stock market hasn’t been doing so well lately.
In the past month China’s Shanghai composite has fallen more than 20%. Source: CNBC.
And that’s gotten some Apple investors scared.
Because China is Apple’s second largest revenue market and its largest smartphone market.
But there’s really very little for Apple to fear.
The Economist pointed out last week that China’s stop market dips aren’t as bad as it seems.
“The first mistake — often made by China pessimists — is to think that the market crash presages an economic collapse. That is most unlikely. True, the stock market is down by a third in a few weeks, but it has fallen back only to March levels; it is still up by 75% in a year.” — The Economist Source: The Economist.
“Lost in the drama is the fact that the stock market still plays a small role in China. The free-float value of Chinese markets — the amount available for trading — is just about a third of GDP, compared with more than 100% in developed economies.” — The Economist Source: The Economist.
So at least for right now, the stock market drop shouldn’t seriously impact China’s economy or Apple’s position there.
Actually, there are some very good reasons investors should be bullish about Apple in China.
With the help of the iPhone 6 and 6 Plus, Apple’s smartphone unit sales were up 72% year-over-year in the quarter ending in March. … Source: WSJ.
And Apple still has room to grow.
"We believe the China growth story will continue, despite recent changes from the Chinese government that added Apple to its 'do not purchase' list." — Gene Munster, Piper Jaffray Source: Financial Times.
And UBS said last week that Apple is convincing Chinese consumers, from multiple income levels, to buy its products.
Adding all that up, it seems about time to stop worrying about Apple’s position in China…
And start focusing on its opportunities.
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