Tim Cook refutes China worries, calls Apple's growth 'strong' in rare mid-quarter update

Posted:
in AAPL Investors edited August 2015
Apple CEO Tim Cook on Monday issued a rare mid-quarter update on the company's performance, saying Apple is continuing to experience "strong growth" in China as he tried to assuage fears about the impact of the Asian nation's economic slowdown.




"I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth for our business in China through July and August," Cook wrote in an email to CNBC's Jim Cramer, which was later posted on Twitter by fellow anchor Carl Quintanilla.

"Growth in iPhone activations has actually accelerated over the past few weeks, and we have had the best performance for the App Store in China during the last 2 weeks," Cook continued.

Apple's chief executive went on to claim that quarterly performance has so far been "reassuring," and that Apple stands to gain in China in the long-term as the middle class expands and access to faster LTE networks grows.

The Chinese economy has slumped dramatically in recent weeks, prompting the government to take a series of steps --?including repeated devaluations of the yuan --?designed to stabilize the situation. Those measures appear to have been only marginally effective, and the continued slide has dragged markets around the world down with it.

On Friday, Apple shares fell into bear territory for the first time in years, one of a number of tech stocks battered by the Chinese uncertainty. Apple dropped even further in pre-market trading earlier Monday, opening at just $94.87 before rebounding back over $104.

The Dow Jones Industrial Average -- of which Apple is a key component -- dipped 1,089 points after Monday's opening bell, though the decline eased to 600 points within 30 minutes of active trading and the index was down just 400 points at press time.
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Comments

  • Reply 1 of 90
    SpamSandwichSpamSandwich Posts: 31,396member
    AAPL hit a 52-week low of $92, but still didn't quite reach my limit of $90.

    Why does Tim talk to carnival barker Jim Cramer anyway? The man is a clown.
  • Reply 2 of 90
    solipsismysolipsismy Posts: 5,099member
    1) Perhaps it's a [I]post hoc[/I] fallacy but that appears to have reversed most of the pre-market drop.

    2) I see this issue in China like the 2008 recession in the US. This will not have any effect on Apple. Those that want Apple's products in China will still be able to buy them. China isn't Greece.
  • Reply 3 of 90

    I think that, a month or two from now, people will look with regret not jumping in at these prices. 8.3x current PE ratio ex-cash; probably 6.5x forward PE.

     

    Insane.

     

    I hope Apple is buying back the heck out of its shares at these levels, about 30% below recent highs. Even if it means paying the extra 10-15% or so in US taxes by bringing its cash back from abroad. There's no need to even do a detailed calculation.

  • Reply 4 of 90
    Go and google Greece's avg hoours worked per year in comparison to Germany before calling them lazy. Don't confuse he country's financial issues with the people's willingness to work.

    sog35 wrote: »
    2000 - .com bubble burst.

    2001 - Apple releases iPod

    2007 - iPhone released

    2008 - real estate crash

    2015 - China 'crash' (not really a crash since China's GDP is still growing at 5-6% just not the 7% Wall St wants)

    2015 - Watch, AppleTV


    Apple seems to always release ground breaking products during economic uncertainty.

    And every time it has had ZERO EFFECT on sales.  


    The China concerns are ridiculous and overblown.  China has over 1 billion people.  And their culture is of EXTREME hardwork, unlike Greece and other Euro nations that are lazy.  This lull in their economy is temporary.

    The China stock crash is overblown.  Looking at one year returns its actually UP 43%.  
  • Reply 5 of 90
    quanster wrote: »
    Go and google Greece's avg hoours worked per year in comparison to Germany before calling them lazy. Don't confuse he country's financial issues with the people's willingness to work.

    The problem with Greece was everyone was working for their government. Government isn't a profit center, it's a drain on an economy. Their misguided socialism caught up with them.
  • Reply 6 of 90
    rogifanrogifan Posts: 10,669member
    I can't wait for the day when iPhone in China is not the story when it comes to Apple. Though I have a feeling we might be 5 years out on that.
  • Reply 7 of 90
    rogifan wrote: »
    I can't wait for the day when iPhone in China is not the story when it comes to Apple. Though I have a feeling we might be 5 years out on that.

    Could you elaborate on your comment?
  • Reply 8 of 90
    bobschlobbobschlob Posts: 1,074member
    Quote:

    Originally Posted by SpamSandwich View Post



    AAPL hit a 52-week low of $92, but still didn't quite reach my limit of $90.



    Why does Tim talk to carnival barker Jim Cramer anyway? The man is a clown.



    You didn't buy at $92. You should have taken off your big red nose.

  • Reply 9 of 90
    rogifanrogifan Posts: 10,669member
    Could you elaborate on your comment?

    I can't wait until there's other stuff in the pipeline where Apple will no longer be iPhone, Inc. I think we're 5 years out on that because I doubt we'll see a new major product from Apple before then.
  • Reply 10 of 90
    bobschlob wrote: »

    You didn't buy at $92. You should have taken off your big red nose.

    I set my limits and that's the end of it. I'm not a day trader. If my limit is reached, fine. If not, I'm not concerned. Trying to guess every high or low is a fool's errand and the only people winning at that game are charging suckers for their trades.
  • Reply 11 of 90
    rogifan wrote: »
    I can't wait until there's other stuff in the pipeline where Apple will no longer be iPhone, Inc. I think we're 5 years out on that because I doubt we'll see a new major product from Apple before then.

    You think Apple will no longer be heavily dependent on iPhone sales in five years? I don't. It's the core of their company now and even if a car is introduced, cars don't have the same annual or two year upgrade cycle phones have.
  • Reply 12 of 90
    sirlance99sirlance99 Posts: 1,154member
    sog35 wrote: »
    2000 - .com bubble burst.

    2001 - Apple releases iPod

    2007 - iPhone released

    2008 - real estate crash

    2015 - China 'crash' (not really a crash since China's GDP is still growing at 5-6% just not the 7% Wall St wants)

    2015 - Watch, AppleTV


    Apple seems to always release ground breaking products during economic uncertainty.

    And every time it has had ZERO EFFECT on sales.  


    The China concerns are ridiculous and overblown.  China has over 1 billion people.  And their culture is of EXTREME hardwork, unlike Greece and other Euro nations that are lazy.  This lull in their economy is temporary.

    The China stock crash is overblown.  Looking at one year returns its actually UP 43%.  

    The Chinese govt made a mistake trying to prop up the China stock market.  At one point it was up 150% in 6 months.  That is irrational and they should have not allowed the bubble to grow that fast. But China still makes a TON OF PRODUCTS and have HARDWORKING people.

    But the stock will still hit $150 this year according to you. Haha!
  • Reply 13 of 90
    rogifanrogifan Posts: 10,669member
    You think Apple will no longer be heavily dependent on iPhone sales in five years? I don't. It's the core of their company now and even if a car is introduced, cars don't have the same annual or two year upgrade cycle phones have.

    I'm going by what Tim Cook told the Wall Street Journal last year. He said iPhone would be the main revenue driver for Apple for the next 5 years.
  • Reply 14 of 90

    At the beginning of the e-mail cook says "But I know your question is on the minds of many investors."  Does anyone know what Cramer's question was?

  • Reply 15 of 90
    Tim's stepping up to call out the bs that Wall Street does to shake the tree and flush people out of the game.
  • Reply 16 of 90
    At the beginning of the e-mail cook says "But I know your question is on the minds of many investors."  Does anyone know what Cramer's question was?

    Cramer is like a blindfolded child swinging at a non-existent piñata.
  • Reply 17 of 90
    eightzeroeightzero Posts: 2,483member

    Like Michelle Bachmann didn't say in that untrue hoax, "the chinese built a wall to keep out the lazy foreigners and it worked. You don't see any undocumented mexicans in china to this day." 

     

    Don't look now, but the DJIA just went up 800 points. Yes, intra-day, but I'm thinking the real profits are in brokerage commissions these days.

  • Reply 18 of 90

    Why do I always see Charles Emerson Winchester III when I see Mao?

     

  • Reply 19 of 90
    Quote:

    Originally Posted by sog35 View Post

     

     

    No one can predict timing of stocks at a 100% rate.

     

    If someone could they would literally be able to take $100 and turn it into $1,000,000,000,000,000 in a month.


     

    You need to take a few zeroes off of that. No matter how omniscient you are, you can't make 1 quadrillion dollars. The GDP of the entire world in 2014 was only 77 trillion dollars for Pete's sake.

  • Reply 20 of 90
    asdasdasdasd Posts: 5,317member
    bobschlob wrote: »

    You didn't buy at $92. You should have taken off your big red nose.

    AAPL starter the day at $96 and zoomed up from there
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