Apple Inc (NASDAQ:AAPL, ETR:APC)’s issues in China remain among the key headwinds needing to be turned around by the technology giant ahead of the release of the iPhone 16 later this year, analysts say.
“Huawei share gains, geopolitical tensions and a softer China economy have created a difficult selling environment for Apple in China again this quarter,” Wedbush wrote in a note.
“It’s clear that Apple is navigating one of the more difficult China demand environments we have seen the last five years.”
Such concerns need to be addressed, according to Wedbush, with a recent visit to the country from chief executive Tim Cook proving “Apple needs China and China needs Apple, despite all the noise”.
That said, Wedbush acknowledged iPhone production is likely to have held firm against projections so far this year, coinciding with strong demand in the US, EU and India.
Wedbush reiterated a bullish view on Apple as a result, maintaining a US$250 share price target and 'outperform' rating.
Pent-up demand for mobile upgrades could exceed 270 million as the iPhone 16 is launched later this year, analysts said, meaning estimates for the year are hittable.
Major artificial intelligence announcements are expected this summer, the bank also noted, with features due as Apple already enjoys the world’s largest installed base of 2.2 billion devices, aiding “rock solid” demand for its services.