28/04/2020
SHANGHAI (Reuters) – Apple Inc’s (AAPL.O) discounts on the iPhone 11 in China and the release of a new low-price SE model have put the company in a better position than rivals to weather a coronavirus-related plunge in global smartphone demand.
While China, which accounts for roughly 15% of Apple’s revenue, appears to be a rare bright spot, investors will be keen to get a picture of global demand when the Cupertino, California-headquartered company reports second-quarter results on Thursday.
The iPhone maker has shut retail stores in the United States and Europe following the COVID-19 outbreak, and China is the only major market where it has been able to reopen all shops.
Consumer spending is expected to be muted as the pandemic has crippled economies and Apple, the world’s second-most valuable tech company, is better armed with the launch of its new price-conscious iPhone model, analysts said.
“Apple is better positioned than most to experience a rapid recovery in a post COVID world,” Evercore analyst Amit Daryanani said in a research note. “We see demand as pushed out, not canceled.”
He added that the launch of the $399 iPhone SE suggested that Apple’s supply chain was getting back on its feet after weeks of shutdown earlier this year.
Analysts expect Apple to report a 6% drop in revenue and an 11% fall in net income in its fiscal second quarter, according to Refinitiv data.
On the other hand, Chinese brands such as Oppo and Vivo who have steadily moved to offer high-end models to challenge iPhones, stand to lose marketshare as bargain hunters choose Apple.
Earlier this month, several online retailers in China slashed prices of the iPhone 11 by as much as 18% – a tactic Apple has used in the past to boost demand. And while initial social media reaction to the new iPhone SE was muted, analysts said they were seeing a pick up in demand.
The cheaper iPhone SE could tempt iPhone owners to opt for a newer device, something they might have otherwise delayed in a weak economy, said Nicole Peng, who tracks the smartphone sector at research firm Canalys.
“People want to avoid uncertainty in a downturn,” she said. “Having a brand like Apple that can showcase quality and make people less worried about breakdowns or after-sales service can bring in buyers.”
CHEAP IS GOOD
Early data suggests that the Chinese smartphone market is recovering rapidly in the aftermath of the virus, and Apple has emerged relatively unscathed.
Sales of iPhones in China jumped 21% last month from a year earlier and more than three fold from February, government data showed, meaning March-quarter sales in the country were likely to have slipped just 1%.
To be sure, a recovery in Chinese demand won’t offset sales lost in the United States and Europe. And the company is yet to launch a smartphone enabled with 5G wireless technology like those offered by Asian rivals, a disadvantage for Apple so far.
But those same expensive 5G models may not sell well in the current climate of frugality, analysts said.
“If there are no massive subsidies (in China), I doubt there will be many smartphone users who will be eager to upgrade to 5G,” said Linda Sui, who tracks the smartphone sector at research firm Strategy Analytics.
Sui expects iPhone shipments in 2020 to be down 2 percentage points at the most, versus double digit declines at Chinese firms.
Apple also has revenue from its services business to fall back on. It has leveraged its large iPhone customer base to boost services revenue from music, apps, gaming and video.
“Apple’s Services segment should remain resilient in today’s work-from-home environment, thereby demonstrating the durability of Apple’s model,” Cowen analyst Krish Sankar said.
Source: Reuters
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20/09/2019
- Superstitious medical student, 23, said it was customary in her hometown to throw money for good luck
- Cousin’s child had fallen ill on flight from Jiangxi to Sichuan, she said
A woman was fined for tossing coins onto the apron at an airport in Sichuan province. Photo: Weibo
A woman who
threw coins onto the parking apron at an airport in southwest China in the superstitious belief it might cure her cousin’s baby’s diarrhoea was instead fined 200 yuan (US$28), local media reported.
The incident happened on September 5, as the woman, surnamed Wang, and a group of her relatives arrived in Xichang, Sichuan province, after flying from Nanchang, Jiangxi province, to attend a family wedding, the Chengdu Business News reported on Friday.
Wang, 23, dropped the coins through the gap between the aircraft and the jet bridge as she and her family were disembarking.
Police said the medical student was shocked when she realised the trouble she had caused. Photo: Weibo
Although no one spotted what she had done at the time, airport workers later found three coins on the ground while conducting a security check and reported the matter to the police.
Officers reviewed footage from the airport’s surveillance cameras and identified Wang as the guilty party and went to see her at her hotel the following morning, the report said.
Wang said that during the flight her cousin’s baby had suffered from diarrhoea and that it was customary in her hometown to toss coins in the hope it would bring the child good luck.
“She said she didn’t realise her action could have had a very serious outcome,” a police officer was quoted as saying, adding that Wang appeared shocked when she realised the trouble she had caused.
However, as her actions had not resulted in any delays to flights or created any other problems, she was charged only with a minor offence.
Many Chinese think tossing coins before a flight will bring them good luck. Photo: EPA
Wang, who recently completed a bachelor’s degree in medicine and was preparing to sit a graduate school entrance examination, was worried the incident might have an impact on her future education and job prospects, the officer said.
More than 5,000 people commented on the story on news portal 163.com, with one asking: “You are so superstitious, how can you treat patients?”
In recent years there have been numerous reports of Chinese travellers causing delays and being punished for tossing coins onto airport runways and even into aircraft engines.
In April, a woman was detained for throwing six coins as she was about to board a plane in southern China in the hope it would guarantee her a safe trip.
Source: SCMP
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