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Apple Inc.’s (AAPL) China sales continued to recover in April, driven partly by the launch of a cheaper iPhone, CNBC reported.
The tech giant sold 3.9 million iPhones in China in April, reflecting a 160% surge from March figures, when it sold 1.5 million smartphones, the Shanghai-based market research firm CINNO Research told CNBC.
The signs of a recovery path since February comes as the world’s second largest economy slowly reopens again after the coronavirus pandemic forced store closures earlier this year that led to sales declines. China iPhone sales slumped 60% in February year-on-year. Since mid-March, all stores in China have reopened.
Apple, which launched its second-generation iPhone SE in mid-April, started to sell the device in China later that month. It starts at 3,299 yuan ($464) in the mainland. iPhone SE accounted for 24% of all of Apple’s 3.9 million iPhone sales in April, according to CINNO Research.
In April, overall smartphone shipments in China rose over 94% to 40.8 million compared with the previous month, according to state-backed think tank, China Academy of Information and Communications Technology.
Five-star analyst Daniel Ives at Wedbush, who has a Buy rating on the stock with a $350 price target, sees a seminal moment for Apple in China with pressure on both ends of the spectrum from a supply and demand perspective amid renewed tensions between the U.S. and China.
The recent Department of Commerce ban on Huawei, preventing it from purchasing semiconductors from U.S. companies, has ignited fears of retaliatory moves against companies such as Apple.
“On the demand story, a relative bright spot during this COVID-19 Category 5 storm remains China which represents a growth linchpin region for the company representing roughly 20% of all iPhone upgrades over the next 12 to 18 months with our estimation that 60 million to 70 million iPhones in China are currently in the window of opportunity,” Ives wrote in a note to investors. “From a supply chain perspective we believe Apple would only be able to move 5%-7% of iPhone production to India/ Vietnam over the 18 to 24 months if the China situation/tensions spirals down a more negative and nasty path over the coming months.”
Ives believes though that “while uncertainty will add to an already worrisome near-term situation around the global demand picture for Apple, the fundamental impact on iPhone production and the potential backlash in the region thus far is more bark than bite”.
Turning now to the rest of Wall Street, analysts have a bullish outlook on Apple’s stock. The Strong Buy consensus is backed up by 27 Buys with the rest split between 4 Holds and 1 Sell. The $318.93 average price target indicates shares are fully priced (See Apple stock analysis on TipRanks).
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