Apple (AAPL) Stock Lower as Chinese Smartphone Market Shrinks

NEW YORK (TheStreet) -- Shares of Apple Inc  (AAPL) are lower by 0.8% to $126.60 in midday trading Monday, following a study by analysts at IDC that showed the Chinese smartphone market has reached the saturation point, according to Reuters.

During the first quarter of 2015, smartphone shipments to China contracted for the first time in six years to 98.8 million. The figure fell 4.3% compared to a year ago due to market saturation, IDC noted in a report.

In 2011, China succeeded the U.S. to become the world's largest smartphone market, Reuters added.

Separately, analysts at UBS cut its estimate of fiscal 2016 sales of the Apple Watch to 31 million from 40 million, based on its "Evidence Lab" monitor tool.

Still, the firm has an overall positive outlook on the product, saying it has the potential to become a "must-have" item over the longer term.

UBS maintained its "buy" rating with a $150 price target on Apple shares.

Apple designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, as well as a variety of related software, services, peripherals, networking solutions, and applications.

The company is based in Cupertino, Calif.

Insight from TheStreet's Research Team:
 
Apple is a core holding of Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. During the most recent weekly roundup, this is what Jim Cramer, Portfolio Manager and Jack Mohr, Director of Research - Action Alerts PLUS had to say about the stock:

Apple (AAPL:Nasdaq; $127.62; 820 shares; 4.01%; Sector: Technology): The shares fell this week on little news. We believe the convenience of using Apple Pay on the Apple Watch (with or without a tethered iPhone), while ensuring a higher level of security and privacy compared to using physical credit cards, is likely to gain traction as a smarter way to pay. By the end of next year, we believe that roughly 90% of the global iPhone installed base will be Apple Pay (NFC) capable.

We expect Apple Watch penetration to also steadily increase over that period, in some cases as an accessory to older iPhone 5/5s/5c. Broadly, we expect Apple Watch to become a convenient and secure repository of electronic credentials, not just for mobile payments, but also for identity/authentication across a variety of usage scenarios -- i.e., airline boarding passes, membership cards, hotel room key, and even enterprise access. We reiterate our $150 target.

- Jim Cramer and Jack Mohr, 'Weekly Roundup' originally published 5/8/2015 on ActionAlertsPLUS.com.

Want more information like this from Jim Cramer and Jack Mohr BEFORE your stock moves? Learn more about ActionAlertsPLUS.com now.

Separately, TheStreet Ratings team rates APPLE INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate APPLE INC (AAPL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

You can view the full analysis from the report here: AAPL Ratings Report

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