Huawei Slashes Prices to Compete with Apple: Analysts Weigh In on AAPL Stock

Apple Inc's upcoming software updates, including new features in iOS 18, iPadOS 18, and macOS Sequoia 15.1, are anticipated to enhance sales as the company looks to expand into additional markets by 2025. However, this optimistic outlook faces new challenges from Huawei, Apple's primary competitor in China, which has recently announced significant discounts for the New Year, aiming to bolster their sales.

Recent Market Developments: In the third quarter of the current fiscal year, Apple reported a slight decline of 0.3% in smartphone sales in China, resulting in a market share of only 15.6%. In contrast, Huawei experienced substantial growth, with its market share increasing by 42% to reach 15.3%. This shift has been highlighted by research from the International Data Corporation, which noted that Vivo now leads the market with an 18.6% share, also marking a 21.5% year-on-year increase.

With Apple's sales struggling, Huawei has taken advantage of the situation by launching major discounts on its top-selling products as part of JD.com’s ‘Super Brand Day’ promotional event. The discounts, which were advertised via Huawei’s Weibo account and reported by Reuters, can reach as high as 3,000 yuan (about $411) and apply to smartphones, headphones, watches, and tablets during a limited time.

Implications for Apple

While it remains to be seen if Huawei's aggressive pricing will lead to a price war among Chinese manufacturers or impact Apple's year-end sales, several analysts have provided insights.

Dan Ives from Wedbush Securities is optimistic about Apple's stock, projecting a potential 26% increase in its value. He believes that ongoing advancements in artificial intelligence will drive a multi-year iPhone upgrade cycle, placing Apple in a strong position for growth into 2025.

As Ives stated on Twitter, "We are entering a golden era of growth for Cupertino, driven by this underappreciated multi-year AI upgrade cycle. The consumer AI revolution is just beginning for Apple!" He recently raised his price target for Apple to $325.

According to Benzinga, the average price target for Apple stock sits at $245.27 based on evaluations from 30 analysts. Among them, the highest target is also from Ives, with his $325 outlook, while Morgan Stanley has set a price target of $273, citing potential boosts in iPhone replacement cycles driven by AI initiatives.

Conversely, Barclays has a more cautious outlook, setting a lower target of $184 per share due to risks including delays in integrating AI features into the iPhone 16 and regulatory challenges Apple might face in China.

Despite these varying perspectives, the consensus among analysts suggests an average price target of around $286 for Apple, which indicates a potential upside of about 12.38% for the company led by Tim Cook.

Current Stock Performance

As of now, Apple shares are slightly down by 0.41% in premarket trading, priced at $254.61. In comparison, the Invesco QQQ Trust, which tracks the tech-heavy Nasdaq, has seen a decline of 0.25% to $521.19. Year-to-date, Apple has recorded an impressive gain of 37.71%, outpacing the QQQ’s increase of 29.78%.

Overall, the competitive landscape between Apple and Huawei has intensified, and how these developments will shape Apple's future sales will be crucial to observe in the coming months.

Apple, Huawei, Analysts