Apple stock drops on iPhone discounts in China

Apple stock fell sharply Thursday on news reports that the consumer electronics giant cut iPhone prices in China due to increased competition with domestic rivals such as Huawei. Apple announced discounts of up to 500 yuan (about $68.50) on its current iPhone models in China. It also is offering discounts on Macs and iPads in the country.
Patrick Seitz for Investor’s Business Daily:
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The discounts come as Apple is facing intensifying pressure from homegrown competitors in China.
Huawei’s Mate 70 smartphone has grabbed market share thanks to its artificial intelligence features. Meanwhile, Apple’s iPhones don’t offer AI features yet in China. Apple is hoping to partner with local internet services firms such as Tencent (TCEHY) and ByteDance to offer AI features in China.

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MacDailyNews Take: When you miss something as big as GenAI, as has Tim Cook’s Apple, significant issues are to be expected and unpalatable measures need to be taken during the panicked scramble to catch up. Of course, Apple would have to pay a price spending so much time under myopic “leadership.”
Apple needs new leadership. The company needs vibrant, visionary, risk-taking leadership again. Apple’s “caretaker CEO” era (iterating products and services conceived by/under Steve Jobs) should have ended years ago. – MacDailyNews, June 6, 2024
As we explained in early April 2024:
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Apple was caught flat-footed, due to a lack of vision on the part of leadership. They were, uh, focused elsewhere. Apple’s traditional data center network is not fit for generative AI. It will take years and billions of dollars to catch up just to where GenAI leaders (OpenAI, Microsoft, Alphabet, etc.) are today.
So, the only solution is to partner with a [Google, OpenAI, Baidu, etc.] for the real GenAI stuff while pretending (marketing) really hard that some on-device AI Apple has whipped up in a few months is “insanely great Apple innovation” that’s at the heart of Apple’s 2024’s AI announcements when it’s really just an adjunct… Watch Apple make a big show of its on-device AI at WWDC and run many ads touting it from June onwards.
Apple hopes to buy time for the data center buildouts and investments that will be required for them to someday own their own AI technology and not have to license it from the likes of [Google, OpenAI, Baidu, etc.].
This is what happens after a decade plus with a caretaker CEO at the helm after he hits the last page of his iteration playbook, yet attempts to stay in the game for too long.
See also:
• Work on Apple Vision Pro began under Steve Jobs – August 23, 2023
• Contrary to popular belief, Steve Jobs knew about Apple Watch – February 13, 2023

The good news is that the average age of outgoing CEOs across the S&P 1500 is 61.6 and Tim Cook will turn 64 on November 1st.