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Leading analyst Craig Moffet suggests that any plans to move the iPhone to India is unrealistic.
Moffett, which takes the chief analyst several times institutional investors, sent a memo to customers on Friday after Financial Times reports Apple By the end of next year, he sought to move production to India from China.
He asks how the step can reduce the cost of tariffs because the iPhone components will still be made in China.
“You have a huge menu of problems created by tariffs, and moving to India does not solve all problems. Now it is provided, it helps to a certain extent,” said the partner Moffettnathanson and the senior director CNBC “Fast money“Friday.” I would ask how it would work. “
Moffett claims that India is not easy to diversify – tell customers Apple supply chains are still fixed in China and will probably face resistance.
“The essence is the global trading war is a bilateral battle that affects the costs and sale. Moving to India can (and we emphasize what can) help with the first. The latter may be a bigger issue,” he wrote to the clients.
On Monday, Moffett reduced the Apple Price target to $ 141 out of $ 184 per share. This involves drop by 33% from Friday closing. According to Factset, the purpose of the cost is also on the street.
“I don’t think about myself as the biggest apple bear,” he said. “I believe very high in Apple. My concern for Apple was more than a company.”
On January 7, Moffett received the “sell” on Apple. Since then, the company’s shares have decreased by about 14%.
“None of this is because Apple is a bad company. They still have a great balance (and) a great consumer franchise,” he said. “It is just a reality that you don’t get good answers if you are a company and your products will be significantly raised and you are heading to the market that will probably have at least a slowdown in the consumer demand from the macroeconic economy.”
Moffett notes that Apple also does not receive help from its carriers to cover the tariff blow.
“You also have the destruction of the demand that is created potentially higher prices. Remember you had AT&T. Verizon and T. Mobile All this week will come out and say that we are not going to sign additional expenses on the tariff (included) phones, “he added. So, you are going to have a certain destruction of demand, which will be even longer periods of holding and slower indicators of the upgrade – all this is probably evaluating the consensus next year.”
According to Moffett, Apple’s reaction in China over US tariffs will also damage the iPhone sales.
“This is a very real problem,” Mofte said. “Volumes really go to Huaweis and Vivos and local competitors in China rather than Apple.”
Apple Stock is out of the winning week – more than 6%. It goes ahead of the quarterly income report on the iPhone Maker, which took place next Thursday after the closure of the market.
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