Apple Closing Store in China for the First Time Ever

Key Takeaways

Just first of all, this signal that we're getting pulling back from one particular area, bricks and mortar in China, is it a big deal for Apple? >> China is a huge deal for Apple. Let's put it in perspective. This one particular store, there's a question mark about this mall. You've had other retailers, US-based retailers like Coach, Hugo Boss, have gotten out of there. So, I'm not sure how much to read into this one particular mall, but let's dial the lens back and talk about the big picture in China. China is a huge market for Apple and they have seen sales declining there for a whole host of reasons. Most recently, you have to look at the domestic economy in China. There are deflationary pressures. There are questions about how much the tariffs are going to affect that economy. Remember, exports are a huge part of China's global economy. So demand there, how big is demand for products like Apple's iPhone? That's what Apple needs to take into consideration. We're going to be hearing from them in the next couple of days to see how things are going in China. And don't forget, there's a lot of competition domestically in China from names like Huawei and Oppo and Vivo. talked about them before, but the competition there is real and people are looking for alternatives to Apple because of this whole all these questions about US China relations and whether and how much pressure the government is putting on domestic uh markets to to focus on China uh names and not Apple. >> That sets us up really well for earnings where I think analyst consensus is that they will swing back to revenue growth on a year-on-year basis in greater China. So we wait for that. The headline this morning is from the Wall Street Journal and that JP Morgan in a pack of many is now the front runner to take over the credit card business. Interesting in the sense that services for Apple was important, but what do we need to know? >> Well, remember that this is an important relationship for the banks. Goldman tried it with Apple, it fizzled. Uh there are questions about Goldman's uh consumer strategy and whether that was the right mix for them. Um it's a big deal for JP Morgan. gives them an opportunity to uh push financial services products to a whole new uh legions of of Apple customers.