SHANGHAI, CHINA – MARCH 21: Tim Cook, CEO of Apple Inc., arrives at the opening ceremony of the recent Jing’an Apple Store on March 21, 2024 in Shanghai, China. The recent Apple store will open on March 21 in the Jing’an district of Shanghai. (Photo: VCG/VCG via Getty Images)
Vcg | Visual China Group | Getty Images
may double its position in China’s smartphone market amid falling iPhone sales and fierce competition at home, Wedbush Securities said on Monday.
Apple must address the challenges facing China, including a difficult macro environment and competition from Huawei, ahead of the iPhone 16 launch, and “it all starts with confirming Apple’s presence in China,” Wedbush said.
China’s Commerce Minister Wang Wentao met CEO Tim Cook on Friday and said his country offers opportunities for each Apple and other firms, and asked the iPhone maker to proceed to expand its business in China to ” common development. according to the press release.
In a statement, Cook said China is a key partner in Apple’s supply chain and the company plans to increase investment in the country in the long term.
Last week, Cook opened Apple’s newest flagship store in Shanghai on Thursday and met with key suppliers in China, according to media reports. He also attended the China Development Forum in Beijing as China seeks to attract foreign investors amid regulatory and global uncertainty.
Cook’s latest trip to China, which Wedbush said is “an indication that Apple could double sales” in China, follows reports that iPhone sales in China fell 24% in the first six weeks of 2024.
Apple is operating under difficult conditions in its largest overseas market, China, facing fierce competition from local Chinese smartphone makers, particularly Huawei, whose consumer business is experiencing a resurgence in the country after premiere of the Mate 60 smartphone.
“The timing of this trip was important because, at its core, Apple needs China, and China needs Apple despite all the noise,” Wedbush said.
Covid-19 lockdowns in China in late 2022 severely disrupted Apple’s supply chain, prompting the tech company to diversify some of its production to countries such as India and Vietnam.
“However, the vast majority of iPhone production and iPhone suppliers will remain in China,” Wedbush said, maintaining his “outperform” rating and Apple’s $250 price goal.
Apple is currently facing regulatory challenges in the US and EU, and although its sales in China have declined this yr, the company became the country’s largest smartphone supplier last yr.
The US Department of Justice sued Apple on Thursday, accusing the technology company of illegally maintaining a monopoly on smartphones. On Monday, the EU launched an investigation into Apple over its so-called anti-steering regulations.
