SHANGHAI, CHINA – MARCH 21: Apple CEO Tim Cook arrives in Shanghai, China, to attend the opening ceremony of Apple’s new Jing’an store on March 21, 2024 in Shanghai, China. The new Apple store opened on March 21 in Jing’an District, Shanghai. (Photo credit: VCG/VCG, Getty Images)
VCG | Visual China Group | Getty Images
apple Wedbush Securities said on Monday that Apple may redouble its efforts in the Chinese smartphone market due to declining iPhone sales and fierce competition in China.
Wedbush said that Apple needs to overcome the challenges it faces in China, including the severe macro environment and competition from Huawei before the release of iPhone 16. “This all starts with reaffirming Apple’s presence in China.”
Minister of Commerce Wang Wentao met with apple Chief Executive Officer Tim Cook said on Friday that China offers opportunities for Apple and other companies and asked the iPhone maker to continue building operations in the country to achieve “mutual development.” according to a press statement.
According to the statement, Cook said that China is Apple’s important supply chain partner and the company plans to increase investment in China in the long term.
Last week, Cook Apple’s latest flagship store opens in Shanghai on Thursday and reportedly met with key suppliers in China media reports. He also attended the China Development Forum in Beijing, as China seeks to attract foreign investors amid regulatory and global uncertainty.
Wedbush said Cook’s latest trip to China was “a sign that Apple may be doubling down on China.” There are reports that iPhone sales in China plummeted 24% in the first six weeks of 2024.
Apple faces a challenging operating environment in China, its largest overseas market, as it faces fierce competition from local smartphone makers, especially Huawei. Launched the Mate 60 smartphone.
“The timing of this visit is important because, at its core, Apple needs China and China needs Apple, despite all the noise,” Wedbush said.
China’s Covid-19 lockdown in late 2022 severely disrupted Apple’s supply chain, prompting the tech company to diversify some production into countries such as India and Vietnam.
“However, the vast majority of iPhone production and suppliers will remain in China,” Wedbush said, while maintaining an “outperform” rating on Apple and a $250 price target.
Apple, which currently faces regulatory challenges in the United States and the European Union, became the country’s largest smartphone supplier last year despite a decline in sales there this year.
The U.S. Department of Justice sued Apple on Thursday, accusing the technology company of illegally maintaining a monopoly on smartphones. The European Union launched an investigation into Apple on Monday over so-called anti-steering rules.
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