Apple’s stock has had a five-day losing streak, the first since January, as investors express concerns over the economic health of China, which is one of the key markets for iPhones.
Apple shares were down 2% at $120.15 in afternoon trading on Thursday and have lost 4% since July 1st. In the first three months of this year, Apple has sold more iPhones in China than the US for the first time, a trend that’s widely expected to grow as Chinese consumers increasingly spend more on premium devices.
Chinese economy could hurt Apple
With 30% knocked off the value of most Chinese shares since mid June, investors say they fear the developments might impact consumer demand for iPhones, and the Chinese economy as a whole.
Individual investors account for a major proportion of stock trading in China, and the recent market selloff might inhibit their disposable incomes.
“China is poised to be Apple’s high-octane fuel for the next few years, especially for iPhones”, said FBR analyst Daniel Ives. “Given a lot of the dark clouds we are seeing in China, that has spooked investors”.
Another factor making investors nervous was a dubious report from research firm Slice Intelligence, that claims sales of the Apple Watch have dropped since its launch in April. Apple has not disclosed sales of the device and is unlikely to do so in the near future, instead lumping sales into its ‘other’ category that includes Apple TV and iTunes. However, investors conveniently forget that the Apple Watch is the world’s most popular wearable and had a more successful launch than even the company’s first iPhone and first iPad models.
The Apple Watch is not seen as a particularly important product for Apple’s profits in the short term, but it’s the first new product developed solely under the management of Tim Cook, and any perceived failure would be poorly received by Wall Street.
Larry Banks is a keen follower of technology and finance. He has worked for a variety of online publications, writing about a diverse range of topics including mobile networks, patents, and Internet video delivery technologies.