Tim Cook's Latest Visit A Sign 'Apple Could Double Down On China,' Says Analyst As iPhone-Maker Faces DOJ Lawsuit And Increasing Regulatory Pressure

Zinger Key Points
  • Apple CEO Tim Cook’s China visit could be a sign that the iPhone maker could “double down” on the country.
  • Amid Cupertino’s recent regulatory battles, the timing of Cook’s trip was crucial as it seeks to reaffirm its commitment to China.

Tim Cook's latest visit to China is a sign that Apple Inc. AAPL could "double down" on Beijing as it battles to douse regulatory fires from all directions, with the latest being the U.S. Department of Justice's (DOJ) antitrust lawsuit.

What Happened: Wedbush underscores the importance of Cook’s visit to China amid the ongoing geopolitical tensions and the company’s declining sales in the region.

The new store, located in Shanghai’s financial hub, is the 57th Apple store in China and the eighth in Shanghai. This is Apple's largest store in the world after the one on Fifth Avenue in New York City.

"The timing of this trip was important as in essence Apple needs China and China needs Apple despite all the noise."

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Despite Apple's recent attempts to diversify its supply chain due to geopolitical tensions, Wedbush believes a "vast majority" of iPhone production will remain in China. Cook's visit was "Apple essentially doubling down on China."

Cook’s visit also included meetings with key suppliers in China, a move that holds significance amid concerns about a potential shift in the manufacturing supply chain from China to countries like India and Vietnam.

See Also: Tim Cook's ‘Buy Your Mom An iPhone' Comes Back To Bite Apple In DOJ's Antitrust Lawsuit

"Beijing sees the writing on the wall as its heightened regulatory environment and general uncertainty has caused foreign investments to leave the country with this conference viewed as an olive branch to key companies like Apple that the tide will start to change."

Deepwater Asset Management's Gene Munster also echoed similar sentiments about Cook's China visit, saying it's a clear message to the Xi Jinping administration that Apple is committed to the region.

Why It Matters: Apple’s sales in China have been on the decline, with iPhone sales falling by 24% in the first six weeks of 2024.

This drop is attributed to tough competition from domestic smartphone producers and Huawei's resurgence.

Despite the challenges Apple is currently facing in China, including a softer economic climate and Huawei’s success with its new smartphones, Cook’s visit is seen as a crucial step in reaffirming Apple’s presence in the region.

That said, "Mad Money" host Jim Cramer believes "nothing good is going to come out of China" for Apple "for now."

Price Action: Apple's stock closed at $170.85 on Monday, down 0.83%, according to Benzinga Pro.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

Photo courtesy: Apple

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