Apple Inc (NASDAQ:AAPL, ETR:APC) has received more daunting news for its iPhone sales, with Jefferies analysts noting a 30% year-on-year decline in Chinese sales in the first week of 2024.
Jefferies also noted that full-year sales in China fell by a total of 3% in 2023, according to the bank’s internal data.
China is Apple’s third-largest market, and plummeting demand raises big questions for the world’s largest company’s earnings in the year ahead.
Last week, Apple was slapped with ratings downgrades from Barclays and Piper Sandler & Co amidst concerns over sustained weak demand for its products.
Unlike bitter rival Microsoft Corporation (NASDAQ:MSFT), hardware-focused Apple has failed to capitalise on the artificial intelligence (AI) bubble, causing its stock to vastly underperform against the rest of the Magnificent 7 tech stock in the past year.
Equities analysts from Goldman Sachs (NYSE:GS), JPMorgan and other major banks have also thrown their weight behind Amazon.com Inc (NASDAQ:AMZN, ETR:AMZ), with 97% of analysts tracked by Bloomberg recommending the e-commerce giant as a solid tech play in 2024.
If iPhone sales continue to decline, Apple’s status as the world’s most valuable company could be a risk.
At the time of writing, Apple had a market capitalisation of $2.86 trillion compared to Microsoft’s $2.76 trillion; less than 4% in share price movement between the two.
Apple is now banking on a successful launch of its Vision Pro augmented reality headset in February.
“Apple Vision Pro is the most advanced consumer electronics device ever created. Its revolutionary and magical user interface will redefine how we connect, create, and explore,” Apple boss Tim Cook said of the $3,500 device.
The era of spatial computing has arrived! Apple Vision Pro is available in the US on February 2. pic.twitter.com/5BK1jyEnZN
— Tim Cook (@tim_cook) January 8, 2024
Though the Vision Pro will be a hard sell at such a high price point, the company’s fiercely loyal customer base has a good track record in supporting premium-priced devices.
Apple shares were trading for $183.6 at the time of writing.