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Many Wall Street analysts on Friday said the selloff was overblown, claiming any impact on Apple’s revenue would be offset by the phone’s popularity in China.
China’s escalating restrictions on iPhone use by government employees accelerated a selloff in global tech stocks on Friday. There are fears that Apple and its suppliers could be hit by rising China-US tensions and increased competition from Huawei. Apple shares fell 6.4% over the past two days, wiping $190 billion from its market capitalization, after news that Beijing ordered some central government employees in recent weeks to stop using iPhones at work.
Many Wall Street analysts on Friday said the selloff was overblown, claiming any impact on Apple’s revenue would be offset by the phone’s popularity in China. Apple shares were up 1.3% in Friday trading, after two days of decline. Apple faces stiff competition from China’s Huawei, which launched two new smartphones – the foldable Mate X5 and Mate 60 Pro+ – that attracted global attention for showing resilience to US sanctions. Some analysts believe Huawei’s moves could be the first step in efforts to return as a rival to China’s national champion Apple after taking some market share following US sanctions four years ago. Apple is set to launch a new iPhone on Tuesday after a weak quarter for sales of its flagship product.
We believe Huawei’s activity this time was well-planned and not sudden. said Evan Lamm, an analyst at Counterpoint, whose outlook for new products is higher than previous estimates. It can manage the psychological expectations of the target consumer group before Apple’s press conference. China has been a bright spot for Apple in an otherwise tough period for iPhone sales, its third-largest market after the US and Europe. Huawei’s smartphone business was decimated after the United States imposed curbs on tech exports in 2019.
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