Apple could be facing an "informal boycott" from consumers in China

Apple could be facing an

While Apple blamed its slowing iPhone sales on China’s weaker economy, certain industry analysts believe the company’s high prices are at fault. But in a new report, economists at Bank of America Merrill Lynch suggest Chinese consumers could be the cause.

With the US and China trade war showing no signs of drawing to a close, it’s claimed that the “spillover from politics” into smartphone sales is particularly high. This has seen local companies encourage consumers to stay away from foreign brands, a move which, according to the report, has led to what is being called an “informal boycott” of US products.

This so-called boycott is significantly affecting demand for Apple’s iPhones in the market. But to make matters worse, it’s being combined with a weaker yuan. Essentially, this means that the dollar value of earnings overseas is reduced, something that further impacts the company’s bottom line.

Fortunately for Apple, the Chinese economy is expected to pick up in early Spring – this could help improve sales – but it seems the US economy may continue to slow past this period. Thus, the benefits of improved performance in China may not be felt.

On a related note, surveys conducted have revealed that consumers in India are showing less interested in Apple’s products too. Here, it is market leaders Samsung and Xiaomi that are capturing the attention of consumers with lower prices and innovative features. As a direct result of this, it seems Apple requires a total strategy rethink in the region.

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92 Comments

1. notfair

Posts: 697; Member since: Jan 30, 2017

GTFO Merrill Lynch!, there is no boycott, it's the freaking high prices at fault, let's stop hiding under a rock and try to find excuses from what's obvious.

6. dimas

Posts: 3286; Member since: Jul 22, 2014

Apple and friends are really trying hard to justify that $1000 price tag. They want to make sure it's not blamed today or their next release years are compromised. Expect more of this "informal boycott" alibi when they flop in other asian countries.

2. hafini_27

Posts: 945; Member since: Oct 31, 2013

No phone worth $1000 or above no matter what brand it is from, honestly.

3. Mikele

Posts: 107; Member since: Nov 19, 2013

All are looking for useless excuses! Just high cost and for me in particular I'm holding on to my pretty 6s Plus

15. slashas

Posts: 124; Member since: Jul 17, 2017

Same with my 7plus with QC chip LTE and WiFi are strong compared to family members xs and maxes :)

4. Cat97

Posts: 1766; Member since: Mar 02, 2017

Yeah, anything can be at fault, just not the ripoff prices. What a joke...

5. bill718

Posts: 23; Member since: Jul 28, 2014

high price + non-innovation design would put iPhone behind the competition.

7. ryq24

Posts: 874; Member since: Oct 17, 2011

It has always been the price.

8. mariosraptor

Posts: 167; Member since: Mar 15, 2012

I’m a loyal apple consumer. But apple has gone to far with its pricing scheme. I’ll keep on my Xs Max for longer unless prices go down on its next iteration

10. AngelicusMaximus

Posts: 633; Member since: Dec 20, 2017

You'll have that phone for a long time if you're expecting the next iteration to be cheaper.

9. Gags987

Posts: 12; Member since: Feb 28, 2018

Way too costly. Not only in India, but everywhere. No one loves to part from their money

11. L0n3n1nja

Posts: 1521; Member since: Jul 12, 2016

As fun as it is to bash Apple, high prices are not their problem in China. The trade war already had Chinese consumers willing to boycott American good over the trade war, this was known since before Apple announced their new iPhones. Since the arrest of Huaweis CFO, the communist party has pushed for local firms to support local tech like Huawei. Its been reported over 200 firms have already implemented policies providing discounted or even free Huawei equipment while discouraging the use of Apple. A few have gone as far as to threaten to take their employees iPhones and some are withholding promotions to iPhone owners. Other businesses like restaurants are providing discounts to customers if they have a Hauwei handset. The Chinese people are retaliating against Apple under guidance of the Communist party, it's gonna take more than slashing the price tag at this point.

12. raky_b

Posts: 369; Member since: Jul 02, 2014

Well, for people in China there is Communist party who makes decisions, in US it's Donald Trump. But thing is, you really don't know what's happening in China, is this true or "fake news" which is so common in US and western media, but we all know for a fact that Donald did forbid Huawei,not just to US but to all alias. So...why would be wrong if China do it to? They also have right not to be spayed on...and we all know about "back doors".

13. Leo_MC

Posts: 6618; Member since: Dec 02, 2011

If you think that the prices are the problem, than the iPhones are not made for you.

16. Truthalltime

Posts: 40; Member since: Dec 08, 2018

Lol, so you're just fine with the price? I don't think ppl have money problems but it's that they don't want to part with their money for something that's not worth it.

17. Leo_MC

Posts: 6618; Member since: Dec 02, 2011

I'm fine with any price for any product but I only buy what I need for the price that I think it's ok for me to spend. I'm ok with Apple only selling €2-3k iPhones (even if it's going to only sell 1 million) - if they are going to justify their cost, I will buy them, if not, I won't; I'm just as ok with Apple selling 1 billion €100 phones. Do you think that Ferrari gives a s**t that billions of people think its cars are too expensive? No, Ferrari makes cars for those who have a reason to buy one and also have the money to do it; the same goes for Apple, Sony and any other brand that offers premium products.

18. wickedwilly

Posts: 575; Member since: Sep 19, 2018

Ferrari's are very different to iPhones, one is a low-volume product only the top few percentage of people can afford to buy one new. iPhones are a commodity product easily affordable for those where contracts are available and for a much larger percentage of the population elsewhere. So obviously price is far more sensitive for an iPhone than a Ferrari.

21. Leo_MC

Posts: 6618; Member since: Dec 02, 2011

Ferrari builds some of the most expensive cars in the world - Apple builds some of the most expensive phones in the world. They are just the same. If Ferrari is too much for you to comprehend, go with Lexus.

23. wickedwilly

Posts: 575; Member since: Sep 19, 2018

Yet again reading problems, when will you learn? I do not disagree that Ferrari or Apples products are some of the most expensive in their respective markets. I made the point that one Ferrari is a low volume seller with a tiny market share in terms of numbers of cars sold (around 100th of 1 percent) and its car prices are way higher than most people earn in a year. Apple is a high volume seller with much lower price way below what most people earn in a year. My point being Ferrari do not have to be so concerned with prices anywhere near as much as Apple, so in this respect are not comparable, as you said, especially in the context of this discussion.

26. Leo_MC

Posts: 6618; Member since: Dec 02, 2011

Whatever, dude, but you should know that in the premium segment of cars, Ferrari is hardly a low volume seller - it actually sells quite a lot, not so much as Porsche but way more than Bugatti or Koenigsegg. I was making a point: just like Ferrari doesn’t give a s**t about those that want to pay €100k for a €500k car (“let them just buy their precious Corvettes and lexuses”), Apple doesn’t give a s**t about those that want to pay €500 for a €1000 phone (“let them just buy their Xiaomis”).

27. wickedwilly

Posts: 575; Member since: Sep 19, 2018

I know that fully well, but you miss the point. Apple is not a Ferrari, Apple sells a product that is little different from a large number of its competitors. It is also a commodity seller that relies on big volumes, not a few thousand. One reason Apple is getting into this difficult time is its arrogance in thinking as your last sentence. It was OK when it had a superior and unique product, but it has now lost that and the benefits of that early market presence are disappearing fast. IOS and the walled garden does give Apple some protection, but the walls are starting to crack. The castle is far from broken, but without attention, we all know how quickly a wall can collapse. As a self-proclaimed CEO you should be aware of this.

28. Leo_MC

Posts: 6618; Member since: Dec 02, 2011

Apple has always been a Ferrari and targeted the premium markets. The "difficult time" you're talking about it's only in your head, Apple is doing just fine.

29. wickedwilly

Posts: 575; Member since: Sep 19, 2018

As a supposed CEO would you not call a 30-40% share price drop in a few months worrying? I am not saying Apple is dead or dying, but to say it is not going through a difficult time is very naive. Yes, Apple focuses on premium markets, I have not denied that. What you keep running away from is that Ferrari sells products the majority of people cannot afford, while Apple a commodity product accessible to huge numbers of people.

30. Leo_MC

Posts: 6618; Member since: Dec 02, 2011

When you’ll learn what the share means, you won’t give a f**k about its price either. It’s been a long time since Apple needed to get money from investors (it actually bought its own stock like crazy); ignoring the moment evolutions, the stock is still on the rise on a long term; the revenue is strong (better than it was last year by a long shot), the employees are happy, the clients are happy (we're not entirely happy but we’re also not mad). There was some dude that said that Apple users have a choice between paying the rent and buying an iPhone; of course that’s just dumb but that goes to show that iPhone is not so much a commodity product as you make it to be. Also, a Ferrari can be bought by a lot of us and Eu citizens, considering that a simple flat is more than double the price of a Ferrari in both parts of the world and the average income is more than 1/4th of its total price. Again, go with Lexus, if Ferrari is too much for you to cope with.

31. wickedwilly

Posts: 575; Member since: Sep 19, 2018

It is "a" share, not the share .... and you accuse me of not knowing what a share is!!!! If you were a CEO of a publically listed company. which you are not, you would be extremely concerned about such a large fall in the share price. The CEO reports to the main Board of Directors who represent the shareholders. If you think shareholders are not concerned about a significant drop in the price of their asset you should give up. I am a client of Apple too and I am not happy, the Sheep blindly follow whatever Apple does, but most are not sheep. A product that sells in 100 of millions is a commodity product, not one that sells a few thousand like Ferrari. How big is the population of Europe, 5-600 million people? Ferrari sold around 8,000 units worldwide, Apple sells 10's of millions in Europe 100's worldwide. Your accounting and economics are both very poor.

32. Leo_MC

Posts: 6618; Member since: Dec 02, 2011

You are right, I only had llc’s. The only ones that are giving a s**t about the share price are the investment banks (and not even them, because the big ones usually hedge) and those that have no idea what is the purpose of a share (thanks for correcting me). The investors only care about dividends, which is generated by the profit, which is generated by the revenue and those 2 indicators are on the rise, so the investors are happy; long time investors should actually be happy by the drop in share price, because they can buy cheaper from those dumb enough to sell until the company starts to send the dividends for 2018. If you are not convinced by now about how unimportant is the share price for a company like Apple, think about the fact that there are a s**tload of shares without voting rights (people just buy them to get dividends, they have absolutely no right to vote). Just like anyone in us and eu can afford an iPhone, anyone in the upper mid class of the same us and eu can afford a Ferrari. That doesn’t mean they just buy either one. In the premium sport car market, Ferrari sells a lot: 8000 (I take your number for granted) is way higher that 4K Lamborghini, 500 for Bugatti. Let’s not forget that a 500$ phone is 10 times more expensive than a regular phone (just like a 200000$ Ferrari is 10 times more expensive than a regular Golf).

33. wickedwilly

Posts: 575; Member since: Sep 19, 2018

Yet again you show your naivety. "investors only care about dividends" is another of your classic statements. I could write a thesis on how this is a stupid statement, with no truth in it at all, but will not waste my time. I will just give you two very relevant examples of why you are wrong. Why did people spend billions of dollars buying Apple shares when Apple has a "no dividend policy" between 1995 and 2012? Did they give their money to Apple for charity. Amazon was founded in 1994, first traded publicly in 1997, and didn’t turn a profit until 2001, IT lost several billion dollars its first few years and still does not pay dividends. "If you are not convinced by now about how unimportant is the share price for a company like Apple, think about the fact that there are a s**tload of shares without voting rights (people just buy them to get dividends, they have absolutely no right to vote)." You are full of ridiculous statements today. Do you really believe the majority of people buy shares in companies to have voting rights? Most people invest via funds and do not care on but about voting. They invest to make money, from dividends, yes, but also capital growth. Do you know about capital growth? Buying shares with the expectation to sell when the share price goes up. Sorry you cannot know as according to you "investors only care about dividends" and do not give "a s**t about the share price" Maths problem again, or ignorance of phone prices. The ASP of smartphones is around 400US maybe you can find a phone for 50$ but they are not your average. That makes an iPhone XS around 2.5x the price not 10X. So are you saying that just because some can theoretically afford a Ferrari it is a commodity product? I repeat Apple sell in the 100s of millions.

35. Leo_MC

Posts: 6618; Member since: Dec 02, 2011

A company issues shares in order to finance its operations and the owner of the share also owns a part of the company (has a right to dividends, to vote, to a part of the patrimony when disbanded etc). Anything else is just scalping - a legal one, but still scalping so stop talking to me about accounting stuff. The asp of a sport car is 100k, that makes a Ferrari cost 2x that price. In a market of a few tens of thousands cars, Ferrari’s sales are decent; just like in a market of a billion phones Apple’s sales are decent. Ferrari doesn’t sell commodities just like Apple doesn’t sell commodities; they both sell premium products, they sell a s**tloads - by the standards of their respective markets, and they don’t give a f**k about those that can’t afford to buy their products.

37. wickedwilly

Posts: 575; Member since: Sep 19, 2018

Shares can take many forms, there is not just one type. There is not only one reason to issue new shares. The owner may issue new shares to raise money, he may also do so to pay for an acquisition, by new tech or ideas, or bring in talent to the company for example. He may not issue shares or sell existing ones. This has nothing to do with your "investors only care about dividends" comment or "how unimportant is the share price is". Same for scalping it has nothing to do with it. You are just diverting because you know I am correct. Now answer my points like capital gains is as a reason to buy shares and why people would buy Apple and Amazon shares when they did not pay dividends for many years. These examples proved you wrong. An iPhone is a phone, a Ferrari is a car, so I take the average of these not specific cars or specific phones, it is not relevant. Apple sells in the 100's of millions so it is a commodity, Ferrari sells in 1,000s so is not. Apple sells 10-20% all phones sold, so is a commodity, Ferrari a small fraction on 1% of all cars so is not. Another way of putting it is iPhones a common sight, they are everywhere. Ferraris are rare. Can you see the difference? Just because iPhones sell for more does not mean they are premium. There are many phones selling for less than an iPhone that are just as well designed and built, if not more so. Some of these are better phones, have more functionality and features too. "they don’t give a f**k about those that can’t afford to buy their products." One reason they are selling less and their share price has tanked.

40. Leo_MC

Posts: 6618; Member since: Dec 02, 2011

Thanks, bro, this is another of you messages that you just repeat what I have already said: a company like Apple - that has over 200 bln $ finances at its disposal - doesn't give a f**k about the price of a share, because it already has all the money it needs to finance every project (it even has all the money needed to buy all it's non-voting shares issued in the last years and still some to buy Disney or Intel, if that's what it wants). The price of stock - just like every price - has nothing to do with the value of a company, it is solely connected to the willingness of the buyer to buy; If Apple is announcing it will be buying for 10$, the price of the stock will plummet. I don't know what you understand through a "commodity product" but for me it's a cheap, average, available everywhere and for anyone, essential product. iPhone was never like that, it has always been an expensive (the most expensive, if you disregard Vertu and PD) phone, designed for people with above than average wealth. Just like Ferrari in cars. You can see a lot of iPhones where you are, but go to India, Pakistan, Brazil, Nigeria, Egypt (in grocery stores, markets, where average people are) and count the iPhones - you are sure to see more Ferraries in Manhattan than iPhones there.

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