Apple Inc. AAPL CEO Tim Cook visited China this week, a move that has raised eyebrows amid the company’s declining sales in the region. Deepwater Asset Management's Gene Munster believes there was a wider message Cook wanted to deliver to the Xi Jinping administration.
What Happened: Munster, a prominent Apple analyst, took to X, formerly Twitter to express his concerns about Cook’s visit to China.
Munster noted that the visit was more significant than the recent news about the Department of Justice's (DOJ) antitrust lawsuit against the iPhone maker.
He suggested that Cook’s visit was to reassure Chinese authorities of Apple’s commitment to the country.
See Also: Tim Cook’s ‘Buy Your Mom An iPhone’ Comes Back To Bite Apple In DOJ’s Antitrust Lawsuit
Munster also pointed out the alarming trend in Apple’s China revenue, which had dropped by 13% in December, and iPhone sales, which were down by 24% in the first half of the March quarter.
He speculated that Cook’s visit was not a PR stunt to boost iPhone sales but a strategic move to spare Apple from any fallout due to a ban on or forced sale of TikTok.
"I believe it was to send a message to Chinese leadership that $AAPL is committed to China."
Looking ahead, Munster predicted that China’s share of Apple’s sales would decrease from 17% in 2023 to 15%, with India and the West compensating for the decline.
Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox.
Why It Matters: Cook’s visit to China comes amid a series of challenges for Apple in the region. The company has been grappling with a significant decline in iPhone sales and has lost its position as the top smartphone seller in China.
These challenges have impacted Apple’s stock performance significantly, with shares experiencing a downturn.
Despite these setbacks, Cook’s visit suggests that Apple is determined to maintain its presence in China, a market that has played a crucial role in its global success.
The outcome of Cook’s visit to China and its impact on Apple’s future will be closely watched by investors.
Check out more of Benzinga's Consumer Tech coverage by following this link.
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Photo courtesy: Flickr
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
