Are there good reasons not to take too much stock in headlines and summaries? Yes. Most of the time we need to scratch the surface of an article or news story to get enough details to fully understand an issue.
For example, we hear how bad various trade deals are for the U.S. but never hear the details or why? Is it bad because someone else cut the deal? Or, is it bad because of another reason? The past year– according to news headlines and various article summaries– Apple is dying in China. Really?
War of the Worlds
Just a few years ago China was great market for Apple’s iPhone. Then along came various trade war saber rattling, market jitters, drops in sales, the ban on Huawei, and suddenly Apple was in a precarious position and the future was looking bleak. Supposedly, Chinese smartphone customers were ditching their iPhones for Chinese-made brands.
Apple was caught up in a war of the worlds– an economic, social, and political unraveling in an important market.
Only Apple knows how well business is in China and the company keeps quiet about both bad news and good news, but maybe the need to scratch the surface a little deeper will yield a more accurate status.
Apple’s iPhone install base in China continued its fifth consecutive month of year-over-year growth in May
What does that mean?
Growing for five months in a row means Apple has grown marketshare in China when all the caterwauling nattering nabobs of negativism have screeched Apple is dying in China.
What’s going on?
Apple gained 51 basis points to put it at 19.5% marketshare
Whoa. Wait! What?
Let’s do some simple math here. 20-percent marketshare for a company whose products prices are double the average smartphone price tag means Apple owns about 40-percent of all the smartphone revenue in China. If you own the revenue at the premium end of any market, then you own the profits, too.
Wait. Isn’t that exactly Apple’s modus operandi?
Why is this happening when it isn’t supposed to be happening? Morgan Stanley analyst Katy Huberty, who follows Apple Inc:
Phone price cuts, greater usage of financing vehicles, lower VAT taxes and Chinese consumer confidence that is up ~10 points from last summer (per the National Bureau of Statistics of China) are contributing to surprisingly stable demand trends.
Oh, you mean Apple adjusted to market conditions? What a novel idea.
Now, as to whether an analysts numbers are a reflection of reality, only God and Apple’s executives really know, but apparently Chicken Little left China back in late December and the falling sky went elsewhere (perhaps to a re-election campaign somewhere).
The point is simple. Take what you read in headline and summary form with a grain of salt or a little skepticism, because sometimes it takes awhile for the truth to become obvious. In this case, Apple seems to be doing quite well with every product it sells.