Oppenheimer has written an investment note about Apple’s falling sales in China, entitled Fading ‘Reality Distortion Field.’ It coincides with a Bernstein estimate that iPhone sales in Apple’s second-largest market have dropped by a massive 20% …
Business Insider reports that Bernstein made the calculation based on two known facts: Apple’s total revenue in China, and a statement by the company about its Mac and Services revenue.
The Oppenheimer report of course references the famed ability of Steve Jobs to hype new products and insist that engineers do things they’ve told him couldn’t be done.
While most analysts expect the iPhone 8 to create a ‘super-cycle‘ similar to or exceeding that of the iPhone 6, where both existing iPhone owners and Android users alike buy the phones in record numbers, Oppenheimer analyst Andrew Uerkwitz is less optimistic.
China is a very different market for Apple, thanks not only to strong competition from local brands, but also the importance of the WeChat platform. This allows many functions to be carried out from within the app, making the draw of Apple’s ecosystem less powerful.
Photo: Shanghai by Ritz-Carlton
