When the media reported that Apple (AAPL) slashed iPhone prices in China ahead of the country’s new year, the bearishness failed to hurt its share price.
Apple’s price cut is only temporary, lasting for a week. Domestic e-commerce firms JD and Alibaba (BABA) offered even bigger discounts than that of Apple. This may sound troubling for Apple iPhone sales.
Fortunately, Apple’s smartphone sales are unique. China’s economy is in a slump that it could not shake off ever since it reopened in November 2022. Manufacturing activity continues to fall as Western firms de-risk their supply chain out of China. As a result, unemployment is higher. For those who still have a job, people have less disposable income.
Bears may criticize the lack of innovation for the iPhone 15. Yet the company will grow global sales by targeting India and other emerging Asian nations. It is unlikely to cut prices elsewhere, especially in U.S. markets.
Apple investors should not worry about the company’s slowdown in China. Instead, foreign investors exposed to this country should worry about more downside ahead. The government has yet to cut interest rates enough, print money, or remove regulation that hurts its real estate and technology industries.