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Will India Be Able to Balance China’s Falling Apple iPhone Sales?

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Dec. 4 2020, Updated 10:52 a.m. ET

Sales fell 26% YoY for Apple in fiscal 2Q16

Apple’s (AAPL) sales in China (FXI) fell by 26% YoY (year-over-year) in fiscal 2Q16 to $12.5 billion. Sales more than doubled for Apple between fiscal 2Q12 and fiscal 2Q15. Apple’s revenue rose from $7.6 billion to $16.8 billion in the same period.

One of the major reasons for Apple’s revenue fall in China was falling iPhone sales and growing competition from domestic players such as Huawei and Xiaomi.

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Icahn exited his investment in Apple

Earlier this year, billionaire investor Carl Icahn exited his investment in Apple. He based his decision on increasing concerns about China. He suggested that China’s weakness is already hampering the stock’s price performance and could continue to affect it in the future.

Icahn had initially viewed Apple as undervalued. In 2015, he gave the stock a price target of $240. Later that year, Icahn started selling off shares of the company, retaining only 45.8 million shares at the end of 2015.

By April 2016, Icahn had sold off all his Apple shares over concerns about China, Apple’s second-largest market after the United States.

According to Counterpoint Technology Market Research, India (EPI) recently overtook the United States to become the second-largest smartphone market after China. However, as we’ve learned, Apple still only commands a 2% share in India’s smartphone market.

In the next part of this series, we’ll try to analyze whether or not Apple will be able to successfully penetrate the Indian market.

Apple accounts for 12.9% of the Technology Select Sector SPDR ETF (XLK). The other top holdings of this fund include Microsoft (MSFT) at 9.8%, Facebook (FB) at 6.7%, and Google (GOOG) at 5.1%.

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