Chinese Stock Market Plunge
Chinese stock markets has been falling unabatedly since June 12th with the Shenzhen Composite Index leading the decline plummeting 38 percent. The crash has wiped off approximately $3.2 trillion off the markets – twice the size of India’s stock market. In order to stem the plunge of stock, 26% of firms listed on mainland exchanges suspended trading locking up $1.4 trillion worth of shares.
What Does This Mean for Apple?
It is a widely known that China is increasingly becoming Apple’s biggest market. In its most recent quarter, Apple sold more iPhones in China then the United States for the first time and seventeen percent of the company’s total revenue came from China in the last fiscal year. Accompanied with a slowing demand for mobile devices, Apple Inc. could be quite vulnerable if China has an all-out economic crash.
So far, Apple has seemingly not been significantly affected by the Chinese plunge and have only lost 2.01% since June12th – not such an abnormal drop for a 25 day period.
(Source: Yahoo Finance)
Apple could be detrimentally effected if China’s economic health deteriorates even further. The company may even be forced to significantly roll back operations there and temporarily cut their mass expansion into the Chinese market.
It must be pointed out however, that it is pointless speculating whether China’s economic bubble could have finally burst or it could just be a small blip in their continuous economic growth at this early stage in the saga.
However, one thing is for certain though, Apple will be watching the developing situation in China very closely.