Poor Sales in China and Electric Vehicle Withdrawal Compound Challenges
Left Out of AI Rally... "May Lose Glory"
The dominance of 'Apple's reign' as the premium smartphone leader is shaking. Recently, Apple has been sidelined in the AI rally leading the big tech (large information technology companies) market, compounded by poor iPhone sales in China and the abandonment of electric vehicle development. Investors are realizing profits through short selling Apple stocks.
On the 5th (local time) at the New York Stock Exchange, Apple recorded $170.12, down 2.84% from the previous trading day. In after-hours trading, the price briefly dropped to $169, marking the lowest level in over four months since October last year.
News of sluggish iPhone sales in China dragged down Apple's stock price. According to market research firm Counterpoint, iPhone sales in China during the first six weeks of this year decreased by 24% compared to the same period last year. Apple's market share in the Chinese smartphone market fell to 15.7%, dropping to 4th place. In the same period last year, it held a 19% share, ranking 2nd. Although Apple has been offering subsidies to discount iPhone prices in China, it has been insufficient to overcome the sales slump.
Apple also fell 2.54% the previous day. This followed the European Union (EU) Commission imposing a fine of 1.84 billion euros (approximately 2.67 trillion KRW) on Apple for violating antitrust laws with its music streaming service. As a result, Apple's stock price dropped more than 5% in two days.
Since the beginning of this year, the news surrounding Apple has been mostly negative. In January, Microsoft (MS) overtook Apple as the company with the highest market capitalization. In February, news broke that Apple was abandoning the development of its electric vehicle, the 'Apple Car,' which had been in the works for 10 years. The response to the mixed reality (MR) headset Vision Pro, ambitiously launched last month, has also been lukewarm. Above all, as the growth theme of American big tech has shifted to AI, stocks like Nvidia, MS, and Meta have surged, while Apple, once an icon of innovation, is considered completely sidelined in the AI rally.
As a result, Apple's stock price has fallen 11.6% this year. Its market capitalization has evaporated by more than $300 billion (approximately 400 trillion KRW). Meanwhile, Nvidia, the leader in AI stocks, has soared 73.5% since the beginning of the year. Meta, Facebook's parent company, surged 38.4% during the same period, and Amazon and MS rose 14.5% and 7%, respectively.
With investors short selling Apple stock, the company even suffered the humiliation of ranking second in short selling profits last month. According to financial information firm S3 Partners, investors earned $661 million (approximately 810 billion KRW) from short selling Apple stock in February. This was the second-highest short selling profit after U.S. cable operator Charter Communications ($816 million), providing investors with significant returns.
Berkshire Hathaway, led by 'investment genius' Warren Buffett, is also reducing its Apple stock holdings. Berkshire Hathaway disclosed that it sold 10 million Apple shares in the fourth quarter of last year, holding 905.6 million shares. Although this accounts for only 1% of its existing holdings, some speculate it could signal further sales in the future.
Some analysts argue there is no clear momentum to lift Apple's stock price.
Rosenblatt analyst Barton Crockett said, "Apple's stock price is at a crossroads," adding, "Following the sunset of the electric vehicle project and the underwhelming launch of Vision Pro, Apple may lose its glory on Wall Street."
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