Morgan Stanley analyst Katy Huberty cut her price target on Apple Inc.
shares to $236 from $253 on Friday, citing weakness in the China market. She said that her supply-chain conversations in Asia suggest that the smartphone market is weakening in China. The country is “following in the footsteps of the U.S. with replacement cycles lengthening after a structurally shorter cycle over the last decade,” Huberty wrote. Rising average selling prices and overall better smartphone quality are leading people to keep their current devices for longer, according to Huberty. She also sees “some risk of churn” at the low end of Apple’s customer base in China, given that some local manufacturers are offering phones with new features such as a triple camera. Huberty kept her overweight rating on the stock and said that wearables and services revenues could help the company amid a weak stretch for iPhones. Apple’s shares are off 0.2% in Friday morning trading, and they’re down 21% over the past three months. The Dow Jones Industrial Average
has dropped 3.4% in that time.
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