Concerns about tech giant Apple’s (NASDAQ: AAPL) iPhones being banned by the Chinese Government could be overblown, according to top-rated Citi analyst Atif Malik. The analyst stated that a majority of Apple’s sales in China are to consumers, not government entities, and government purchases account for less than 1% of total iPhone revenue in the country.
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Even if such a ban on the usage of iPhones by Chinese government employees was formalized, it’s unlikely to have a significant impact. Explaining further, Malik pointed out that a similar ban on government-owned PCs last year had minimal consequences. The analyst reiterated that experts don’t anticipate the ban extending to Chinese consumers and believe Apple’s volume will remain largely unaffected.
Malik added, “Premium phones are ~26% of total smartphone sales now, compared to 19% in 2019. Apple takes 70% of the premium market in 2022, compared with 61% in 2019.” The analyst pointed out that the company’s market share in China has nearly doubled to around 17% in the first half of this year from 9% in 2019.
Malik has a Buy rating with a Street-high price target of $240 on the stock, implying an upside potential of 36% from current levels.
Analysts remain cautiously optimistic about AAPL stock, with a Moderate Buy consensus rating based on 22 Buys and eight Holds.
