Chris Justham, relationship manager for Seven Investment Management, joined Nick Batsford and Zak Mir on the Tip TV Finance Show to discuss the potential of Apple (NASDAQ:AAPL) and whether China’s economy is really the principle culprit for damaging global commerce.
How engaged will the markets not yet infiltrated by Apple be?
Justham outlined the success of Apple Inc (NASDAQ:AAPL) and how they have sold 220 million units at around $600 a piece. However, to continue their success, it is predicted Apple would have to get 95% of its users to recommit to new contracts. Justham outlined how the IPhone’s are used widely in the developed world, with 44% of US phone purchases being the Apple product.
Meanwhile, in China only 13% of people use an IPhone, whilst only 1.8% do in India, highlighting the great availability for expansion. This led Mir to question when the Apple products stop developing, having just increased the battery length, and Justham agreed that if they aren’t able to keep achieving further research and development of their product, they will certainly lose business.
Is China and the devaluation of its currency the primary cause for global slowdown?
Data in terms of the US Dollar highlighted by Justham shows South Korean imports down 15%, oil imports into China down 53% and imports generally down 16% in the first half of the year. However, the USD strengthened recently, and one of the actual impacts is that oil imports are actually up 8%. Justham added that China’s stock market is down 40%, but hasn’t reached the huge intervention seen in 2008. To finish, he noted that China isn’t operating like a real market, and this is because it isn’t one.