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Apple (AAPL) Is Flailing With Earth’s Biggest Smartphone Market

Austin Smith

Published: February 14, 2025 9:35 am

24/7 Wall St. Key Points:

• Apple’s (NASDAQ: AAPL) market share in China has dropped to fifth place, facing increasing competition from domestic smartphone brands and regulatory scrutiny.
• China’s government has launched an antitrust investigation into Apple’s App Store, possibly in retaliation for U.S. trade policies.
• Despite Apple’s efforts to shift production to Vietnam and India, China remains its key manufacturing hub, making it vulnerable to geopolitical tensions.
• Apple’s best days may be behind it, but The Next Nvidia Stocks are just revving up. Click here to see why, before everyone else catches on.

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Transcript:

[00:00:04] Doug McIntyre: Apple cannot get out of its own way in China. If you look at the earnings report that came out, the, what they call greater China is the only real blemish that I would say. In the earnings report, the problem is, is that the Chinese market is the largest smartphone market in the world.

[00:00:21] Doug McIntyre: They have a billion smartphones. The U.S. only has 300 million. And so what happened? Apple is now number five in terms of market share in China. Okay. The phone companies ahead of it are all Chinese based companies, so that’s number one. Number two is, is that the Chinese, I think in react retaliation to the Trump tariffs are saying that they’re gonna start to examine whether the Apple App Store is, you know, some sort of antitrust stuff.

[00:00:55] Doug McIntyre: They didn’t make it .

[00:00:56] Lee Jackson: They’ve already started that investigation. You’re exactly right.

[00:01:00] Doug McIntyre: So, if I’m an Apple investor, I’ve gone from being sort of worried about China to being terrified.

[00:01:08] Lee Jackson: Yeah, and the thing that would be so great if they could pull it off, and they’ve been moving production out of there. I think they’ve moved some to Vietnam, I think they’ve moved some to India, but iPhone production is in China.

[00:01:23] Lee Jackson: And if they decide that they are not really very happy with the United States and they’re not happy with Tim Cook and they’re not happy with that.It could be a big problem and you would have thought at some juncture they would have slowly tried to repatriate some of that production back to the United States.

[00:01:43] Lee Jackson: You know, but it’s either too expensive or too costly or, or the, the overhead involved in making an iPhone is just too, too hard to do.

[00:01:54] Doug McIntyre: A famous comedian recently said, if you move the production of the iPhone to the United States, because of the labor costs, a new iPhone would cost $9,000.

[00:02:06] Lee Jackson: It’s like, okay.

[00:02:07] Lee Jackson: That’s probably not that far off the deal. It’s funny. I recently, uh, redid my, I had a 14 and you know, as we’ve told our, our viewers and written about at length, uh, the OS 18 doesn’t really work on is certainly the AI function in the new software doesn’t work on a 14. So I was able to get one and it was, they still are trying to make deals, but they’re still discounting to get you in there and they discounted to get me in there and I got one for me and my wife and I just did it online with T-Mobile (NASDAQ: TMUS).

[00:02:40] Lee Jackson: It was. Pretty simple, but there’s going to be a point where if our friction with China grows, which I can only bet it will grow unless she is ready to sit down with Donald Trump and say, okay, we’re going to find a way to fix this because China’s economy is horrible and it’s getting worse and worse and worse.

[00:03:00] Lee Jackson: And just listen to my old pal, Kyle Bass, he’ll tell you exactly how bad it is. And they have to export, they have to export because collapse. So there’s, there’s a good chance that she will make a deal with Trump to avoid really heavy tariffs, but there’s going to have to be something.

[00:03:18] Lee Jackson: There’s have to be a big carrot to make Trump like that.

[00:03:22] Doug McIntyre: Yeah, no, I think that that’s right. In the meantime, though. Apple is definitely not a buy here, okay? Maybe you could say, you know, you want to hold it, but, uh, there’s no sign that China’s getting any better. No, no one, none of the places, CounterPoint, IDC, the people who follow market share in China, not a single one of them has said, wow, Apple’s starting to move the right direction.

[00:03:48] Doug McIntyre: There’s no evidence of that.

[00:03:49] Lee Jackson: No, we’re not getting those indications. And again, like you’ve mentioned numerous times, Doug, a big part of their money is the service business. You know, just that, that recurring service business that you know, you get every. Month or every year or every whatever. And it’s like, uh, okay, that can’t lead them forward.

[00:04:09] Lee Jackson: And there’s just too many people that continue to comment about, there’s just been nothing new from nothing new except, you know, a new iPhone because nobody cares about earbuds and nobody cares about the iPad or the watch. It’s just like too few people have them.

[00:04:26] Doug McIntyre: Yeah, no, it’s true.