The situation is getting worse for Apple in China and an estimate suggests that 20 million iPhone sales could vanish from one of its largest consumer markets due to a ban by the Chinese government and tough competition from Huawei.
Bank of America Analyst says that China accounts for about 40-50 million iPhone sales. However, the latest China ban could undermine this number by up to 10 million units. The analyst mentioned that the loss could escalate even further if China expands this restriction.
“We estimate that every 1mn iPhones translates to about a penny in EPS. The prior foreign-branded laptop ban announced in 2022 allowed for a 2-year time frame to comply. It remains unclear what the timing of this potential ban would be.” BofA analysts wrote in a client note.
Following this news, Apple shares tumbled 6.4% over the last two days, wiping $190 billion from its market capitalization.
Huawei vs Apple:
That’s not it, Huawei has also made a surprise return to the competition and it is causing mayhem in the entire industry.
Huawei Mate 60 Pro, which was launched on August 29, is making robust growth among consumers. The company is already making out-of-stock sales for the new flagship lineup and the damnd continues to rise. Today, Huawei released two more phones – Mate 60 Pro+ and Mate X5 foldable in China.
With these gradual revelations, Huawei is leaving no stone unturned to regain momentum in the home ground. And the trend shows that the tech maker has been successful in its plan. In that case, Huawei is also a major hurdle in front of Apple for its upcoming iPhone 15 series, which will be unveiled on September 12.
The analyst predicts that Apple could lose 10 million iPhone shipments to Huawei in the coming year. Combined with the ban in China and faceoff with Huawei, Apple could lose up to 20 million iPhone shipments in 2024. The number of affected iPhone sales is massive and if this occurs, the figure could affect Apple’s business forecast.
(source – investing)