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Apple's (AAPL)  first-quarter report card was fairly ho-hum for a company that we expect so much from. Economic weakness emerging in China, one of its largest end markets, was the culprit. But this lull in Apple's breakneck growth, and subsequent share price decline, could be an opportunity for long-term investors. 

A consensus-beating earnings-per-share of $3.28 (versus $3.23) and an in-line revenue performance of $75.9 billion (versus $76.6 billion analyst consensus and guidance at $75.5-to-$77.5 billion) in the first quarter should hardly be cause for alarm. That said, a mere 0.4% year-over-year growth in iPhone shipments at 74.8 million is indicative of things to come, at least in the near future. Sales of iPhones are expected to decline in the second quarter, according to management. This will be for the first time since the product's launch in 2007.

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As for the stock itself, a lot of the expected weakness in growth rates and headwinds in the sale of iPhones are already priced in. With a cash pile of over $200 billion, the company can consider maintaining its stock buy-back initiative which further provides cushion to the share price. Therefore, unless China spirals down into unchartered territory of significantly lower growth rates, long-term investors should fancy this blip to enter or accumulate.

Apple's big bets on China have paid off handsomely in the recent past with the region now accounting for nearly a quarter of its revenue, more than the whole of Europe. Clearly the company is expected to feel the heat of a slowdown in the world's second-largest economy. Given that, the iPhone 6s, Apple's most recent version of the phone, and the Apple Watch have also fallen short of meeting the high expectations.

However, if history of Apple has taught us anything, the company will continue to innovate and promote its Apple Watch whose performance is dependent on the iPhone user base and should pick up with some lag. In the interim, headlines from China would play a role in shaping the company's performances in the coming quarters.

At Aranca, the research and analytics company where I work, we have a research team in China. Here's what they had to say about Apple and the iPhone: 

  • Clearly the features of iPhone 6s and 6s Plus weren't enough to lead to an upgrade for many users, especially when an upgrade from iPhone 5 to iPhone 6 happened barely a year ago.
  • Further, the large user base in China hasn't warmed up to the Apple Watch and our China analysts simply put it down to consumer taste, which is low on high-end technology consumption.
  • Lastly, the recent market crash has also played its part. A majority of the public ownership of China's stock market are retail investors, who have seen a sizeable chunk of their portfolios evaporate in this collapse. There is a high likelihood of big ticket buys (iPhones clearly qualify as one) getting postponed.

What has also not worked in Apple's favor is the strong surge in the dollar versus other global currencies, making its products more expensive in those markets. A $100 worth of Apple's non-US revenue 15 months ago is worth nearly 15% less today. While investors would not penalize Apple for cross currency headwinds, headline numbers do look weak. For example, a 2% year-over-year growth in revenue this quarter, would be 8% year-over-year growth in constant currency terms.

It will be interesting to see how Apple copes with the pressure. Product innovation has always been the company's hallmark and now is as good a time to answer critics as ever. Another iPhone version is expected in 2016 and would be important how Apple sets the tone for it. In comparison to its flagship phone product, other initiatives such as Apple Watch, Apple Music or even bytes around Project Titan -- its ambitious electric car project set for launch in 2019 -- would take some sort of a back seat.

-- This article was co-written with Avinash Ganesh Singh, Senior Analyst, Investment Research and Analytics at Aranca