According to the Zhitong Finance APP, Goldman Sachs pointed out in a Research Report released on March 17 that data from the China Academy of Information and Communications Technology (CAICT) shows that in January 2025, the market in China had a smart phone shipment volume of 27.2 million units (a year-on-year decrease of 14%), of which shipments of Chinese brand smart phones were 22.8 million units (a year-on-year decrease of 13%), and shipments of foreign brand smart phones were 4.4 million units.

Goldman Sachs stated that the shipment volume of foreign brand smart phones in January (which the firm regards as a representative indicator of Apple iPhone sales in the Chinese market) decreased by 21% year-on-year. Although this represents a slowdown compared to a 1% year-on-year increase in December 2024, it still outperformed the year-on-year declines from September to November 2024 (which were 40%, 44%, and 47% respectively).

Goldman Sachs added that the data from December last year and January this year may have been driven by inventory accumulation, since China officially implemented the national smart phone consumption subsidy policy starting January 20, 2025.

Goldman Sachs noted that month-on-month, the shipment volume of foreign brand mobile phones increased by 17% in January 2025, but this was below the average month-on-month increase (51%) during the same period in the past three years (2022-2024). In terms of market share, in January 2025, the market share of foreign brand mobile phones in the Chinese market was 16%, an increase from 11% in December 2024 (mainly due to seasonal factors), but slightly lower compared to 17% in January 2024, and still significantly below historical levels, as 16% is far lower than 48% in January 2023 and 22% in January 2022.

From the data on the shipment volume and market share of foreign brand mobile phones, it can be inferred that Apple's iPhone is performing weakly in the Chinese market, which is very important for Apple. In addition to sluggish growth in the Chinese market, concerns over the high valuation of Apple Stocks and the uncertainties brought by the trade war have dragged Apple’s stock price down by nearly 15% this year, with the stock price dropping to its lowest level since last August last week.

However, Goldman Sachs still maintains a view on $Apple (AAPL.US)$ The "Buy" rating has a 12-month Target Price of $294. This Target Price represents an increase of about 38% compared to Apple's closing price of $212.69 on March 18.

Goldman Sachs pointed out that Apple’s core competitiveness includes: defining categories through design and innovative products (such as iMac, iPhone, iPad, Apple Watch, AirPods), digital privacy protection, and providing quality services and experiences. These competitive advantages contribute to its unparalleled brand strength. Apple's brand loyalty has led to a continually growing user base, providing visible revenue growth by reducing user churn and lowering the cost of acquiring users for the release of new products and services.

Goldman Sachs believes that concerns in the market over the slowing revenue growth of Apple products overshadow the strong strength of the Apple ecosystem and the sustainability and visibility of related revenues. The expanding base of active devices, the long-term growth trend of the service business, and the incremental demand brought by innovative products should be enough to offset the cyclical headwinds in product revenue (such as the impact of the extended replacement cycle on iPhone demand and weakened demand in the PC/tablet market).

Goldman Sachs believes that Apple's current valuation is still attractive compared to historical levels (whether in absolute valuation or relative to Technology peers). In the next five years, Apple's Services Business will become the primary engine for gross profit growth, which should mark a turning point in its investment narrative in Services Business and support Apple's high valuation levels. The sustainability of Apple's active device base, as well as the revenue growth visibility brought about by the addition of more services and products, are factors supporting the company's recurring revenue or Apple as a Service opportunity.

However, Goldman Sachs also pointed out the main risks Apple faces, including: macroeconomic headwinds, increased product durability leading to weakened consumer demand for its products and services due to lack of product innovation; potential supply chain disruptions caused by geopolitical tensions; increasingly fierce market competition; regulatory risks; and capital allocation execution.

Editor/rice