Apple Stock at Risk Amid Falling iPhone Sales in China

Apple’s stock is facing pressure as iPhone sales in China, its second-largest market, fell by 18.2% in the latest quarter. This decline follows a similar 11% drop in the final quarter of 2023, prompting Apple to cut iPhone prices by up to $70.

However, price reductions have not solved the core issue—Apple’s strategy of maintaining high prices for its iPhones, assuming customer loyalty, doesn’t resonate with the majority of Chinese consumers who prefer local, more affordable alternatives.

In the latest quarter, Apple’s market share in China slipped to third place, with Huawei taking the lead. Huawei’s sales grew 15.5%, fueled by its ability to offer phones with no U.S. technology, which appeals to Chinese consumers.

Apple’s reliance on a local partner to provide AI infrastructure has also hindered its ability to offer the full benefits of its latest AI features in China.

Despite these challenges, Wall Street analysts remain somewhat optimistic, with a consensus price target suggesting an 11% upside for Apple’s stock.

However, two analysts recently downgraded their ratings, citing weak iPhone sales and a general slowdown in the consumer electronics market. The analysts also raised concerns about Apple’s ability to generate consumer interest in its AI features, which have not been well received.

With the iPhone market in decline, Apple is in need of a new product to drive growth. Without a clear successor to the iPhone, investors may want to consider other options for their portfolios.