Analysts Say Apple Has Peaked, Losing Ground In Chinese Market
In the lead-up to Apple Inc’s latest earnings report, analysts have said that the company has passed its peak.
“Our opinion [is] that Apple has peaked under the leadership of CEO Tim Cook,” said Colin Gillis of BGC Financial L.P.
The firm downgraded their rating of the company’s stocks to ‘Sell’ and said “[W]hen we ask ourselves ‘Do we see Apple gaining or losing its next $100 billion of value,’ the answer is losing.”
Many consider the major factor here to be China.
China generates about a quarter of Apple’s revenue, and the decline in market share here accounts for much of the company’s expected drop-off in sales.
While the company’s expansion to the region fuelled strong growth early on, the company has stalled due to rising competition from local manufacturers.
Both Huawei and Oppo launched their flagship phones in the Chinese market earlier this year, successfully siphoning Apple’s prominence in the region.
Others still hold out hope for the Cupertino-based tech firm to swing back in 2017, with this year’s iPhone 7 expected to be largely a stopgap iteration before next year’s model.
Some analysts, like Timothy Arcuri of Cowen and Company LLC, note that “Given our installed base work, we see a “super-cycle” in ’17 and iPhone 7 could even sell a little better than bearish expectations.”
He’s not the only one expecting the company to bounce back, with the Wall Street Journal’s Steven Russolillo saying the company is “ripe for a rally.”
Expect more news when Apple releases their latest earnings report later this week.