Trade conflicts with the United States has not gone unnoticed. The Chinese economic growth has already slowed down significantly, and analysts are certain that this is only the beginning of a heavier economic recession. "There are numerous signs of a rapid decline in consumer demand in China," Goldman Sachs said. A drop in demand not only has a negative impact on the local economy, but also threatens the financial results of large global companies, such as Apple Inc.
According to experts, if the situation is not changed, weak consumer demand, including that in the premium segment of the market, will affect the incomes of the technology giant. In the third quarter of this year, sales of smartphones in China may fall by 15% annually. Apple itself has not yet commented on the situation, so investors are waiting for November 1, when the company is publishing the next series of financial reports and, possibly, will present a plan for action in the Chinese market. Generally, Apple should find points of growth in the Asian market, while experts expect a conservative forecast for a clearer picture. At the moment, Goldman Sachs forecasts Apple's earning of $ 11.78 per share in the current fiscal year and $ 13.77 in 2019. However, if we consider the worst scenario, then Apple's earning per share in the fourth quarter could be 4% lower than the current forecasts.
According to preliminary forecasts, Apple will sell about 80 million smartphones in the fourth quarter, 13 million to be sold in China. This is 16% of all smartphone sales of the company. At the same time, iPhone sales in China accounted for 19% of all sales in the fourth quarter of 2017 and for 18% in 2016.
