iPhone’s Strong Sales Put To Rest Fears Over China Slowdown


iPhone’s Strong Sales Put To Rest Fears Over China Slowdown

While many analysts have reported on Apple’s recent growth troubles, the new iPhone seems to have stemmed some of those fears. The new phone’s reported blockbuster sales in China lead many to believe that the worries regarding the company’s overall growth in the country may be an overreaction.

To illustrate this, the company’s shares rose almost 3 percent in early morning trading on Wednesday.

The value of Apple’s stock has declined by about 7% in the past three months as investors continue to worry about China’s slumping economy .

The company’s sales in Chinese regions, including Taiwan and Hong Kong, nearly doubled in this year’s third quarter. In fact, third quarter sales accounted for almost 25% of Apple’s total sales for the year.

Atlantic Equities analyst James Cordwell reported that, “If the Chinese consumer is pulling back on spending then it seems to be either at the very high luxury end or maybe on some of the everyday non-essential items. I think the smartphone is increasingly viewed as an essential in China. So, I don't see the economy weighing significantly on Apple growth over the next few quarters.”

Apple Chief Executive Tim Cook further downplayed the concern about China’s economy. Cook stated that, “If I ... just look at how many customers are coming in our stores regardless of whether they are buying, how many people are coming online and in addition to looking at our sales trends, I would not know there was any economic issue at all in China.”

Many large United States companies have expressed fears and concerns regarding China’s slowing economic growth.

William Blair analyst Anil Doradla points out that Apple has many things going for it. “These include the rising middle class and stronger purchasing power in the emerging markets, especially China and India, combined with the company facing little or no competition in the high end of the market.”

Apple’s strong results are in line with stronger-than-expected earnings from companies like Nike and Alibaba (China’s version of Amazon). After the open of Wednesday’s market, Apple’s stock was trading at $117.35.

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