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Apple Shares Slide in Friday Morning Trading After Another International Setback
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Shares of Apple Inc. (AAPL - Free Report) were around 2% Friday morning after the regulator of intellectual property in Beijing ordered the company to stop selling the iPhone 6 and iPhone 6 Plus in the city, citing that the phones’ designs are too similar to a Chinese phone.
The order actually was dated back in May, and the company has been appealing the ruling. Apple has said that all of its phones have been and are still on sale in the country during the appeal process, though some mobile-phone stores already have switched from the older model and now sell the newer iPhone 6 and 6s Plus phones.
Though the impact of the order is yet to be seen, it does lead to the larger picture of Apple’s struggles in international markets. For instance, in May China shut down Apple’s iBooks and iTunes Movies services, as regulators said that the company did not have the proper licenses.
News of the order itself isn’t likely what has investors worried, it is more the uncertainty of whether or not the Chinese regulators will cause issues when Apple rolls out its next iPhone. With China accounting for approximately 25% of the company’s sales in its most recent quarter, any setback to the rollout could cause Apple to make a massive hit in revenue.
Bottom Line
If there’s one thing that investor’s hate and that causes worry, it is uncertainty. The ban on selling their older models likely won’t have that big of an effect on the company, but the unpredictability of Chinese regulators and the Chinese market in general towards Apple is a concern to the company and its investors, especially with the company’s reliance on the country for a substantial portion of their revenues. Only time will tell if Apple will face further challenges in one of their biggest markets.
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Apple Shares Slide in Friday Morning Trading After Another International Setback
Shares of Apple Inc. (AAPL - Free Report) were around 2% Friday morning after the regulator of intellectual property in Beijing ordered the company to stop selling the iPhone 6 and iPhone 6 Plus in the city, citing that the phones’ designs are too similar to a Chinese phone.
The order actually was dated back in May, and the company has been appealing the ruling. Apple has said that all of its phones have been and are still on sale in the country during the appeal process, though some mobile-phone stores already have switched from the older model and now sell the newer iPhone 6 and 6s Plus phones.
Though the impact of the order is yet to be seen, it does lead to the larger picture of Apple’s struggles in international markets. For instance, in May China shut down Apple’s iBooks and iTunes Movies services, as regulators said that the company did not have the proper licenses.
News of the order itself isn’t likely what has investors worried, it is more the uncertainty of whether or not the Chinese regulators will cause issues when Apple rolls out its next iPhone. With China accounting for approximately 25% of the company’s sales in its most recent quarter, any setback to the rollout could cause Apple to make a massive hit in revenue.
Bottom Line
If there’s one thing that investor’s hate and that causes worry, it is uncertainty. The ban on selling their older models likely won’t have that big of an effect on the company, but the unpredictability of Chinese regulators and the Chinese market in general towards Apple is a concern to the company and its investors, especially with the company’s reliance on the country for a substantial portion of their revenues. Only time will tell if Apple will face further challenges in one of their biggest markets.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>