Apple to face further "challenges" in China as sales slump continues: HSBC

Apple to face further
Apple iPhone XR

Previously, HSBC had already reduced its targets for Apple’s stock and switched its recommendation from Buy to Hold. But in light of recent developments – the Cupertino giant severely lowered its Q4 2018 revenue guidance last week – HSBC analysts are now reducing their price target for the company’s stock even further.

Despite anticipating certain “challenges for Apple” in China due to the local economy, the Cupertino giant appears to have faced a number of Apple-specific problems. Namely, it seems the way Chinese consumers view the iPhone has begun "shifting" dramatically. Alongside this, current owners appear to be holding on to smartphones for longer due to a lack of innovative features on newer models. Ultimately, the true "intensity" of Apple's problem has surprised HSBC. Because of this, analysts at the firm are now placing a $160 target on Apple’s stock, down from the previous $200 target.

As noted, over the past 10 years Apple has managed to increase its ASP by around $220, although half of this was implemented throughout 2018. Over time this has allowed the brand to offset slowing sales but with prices now starting to affect total revenue, the firm believes any further increases will be difficult to pull off.

As a direct result of these Apple-specific factors combined with China's current economy, HSBC has also announced that it is cutting its 2019, 2020, and 2021 revenue forecasts by between 5% and 7%. Similarly, the company’s updated net income estimates are now almost 9% lower than previously.

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7 Comments

1. notfair

Posts: 673; Member since: Jan 30, 2017

good, all this capitalist growth is totally unsustainable, we will be f**ked in a couple of years because of them. recession is coming.

2. cncrim

Posts: 1535; Member since: Aug 15, 2011

Dont see a reason to upgrade, it is the same phone with a notch and little improve. Keep that thousand, you can do alot with it take a your love one out and some down the the line you can get lucky. Can't do that with Apple LOL.

3. OneLove123

Posts: 658; Member since: Aug 28, 2018

$56 dollar discount ain’t gonna help.lol

4. TBomb

Posts: 1036; Member since: Dec 28, 2012

only apple can think that putting the same screen from the iphone 4 (2010) in a 2018 phone and adding a notch would be worth a 50% price increase ($499 to $749).

5. darkkjedii

Posts: 30687; Member since: Feb 05, 2011

Apple is about to drop those prices. More BOGO coming up.

6. Poptart2828

Posts: 290; Member since: Jan 23, 2018

Imaging a stronger presence from xiaomi, vivo, oppo, Huawei and Meizu in the US where apple is strongest. Safe to say sales for Apple would suffer drastically.

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