Apple faces lukewarm demand in China after quarterly revenue drop -analysts
Apple should brace for a weakening of demand in China as shoppers curb spending in an anemic economy, some analysts warned on Friday, after the iPhone maker said demand had rebounded in mid-June after COVID-19 lockdowns hampered sales.
The iPhone maker on Thursday reported quarterly revenue in Greater China fell 1%, snapping a streak of strong quarters in the region.
Overall, Apple's revenue rose 2%, beating estimates, and the company said there had been no slowdown in demand for iPhones globally despite macroeconomic indicators turning negative.
Apple boss Tim Cook blamed the drop in Greater China revenue on strict lockdowns in Chinese cities, which forced millions to stay home and hammered the Chinese economy.
"We did see lower demand based on the COVID lockdowns in the cities the COVID lockdowns affected. And we did see a rebound in those same cities toward the end of the quarter in the June time frame," he said.
China's strict curbs to stamp out COVID have undercut a recovery in the world's second-largest economy, with consumer confidence hovering near record lows, private investment slowing and youth unemployment at a record 19.3%, prompting calls for more urgent government stimulus.
Apple this week announced discounts on iPhones and other hardware for Chinese customers, a move it occasionally makes when sales are slow.
Still, the company is more insulated from a weak economy because it is the only leading brand offering expensive devices, analysts said.
Apple's chief competitor in the high-end segment, Huawei, has seen sales collapse after U.S. sanctions prevented it from sourcing key components. Honor, a Huawei spin-off, is growing fast but is yet to break into the high-end market.
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