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What Billionaire Carl Icahn Thinks About Apple Inc. (AAPL)

Apple Inc Carl Icahn

Billionaire investor Carl Icahn unloaded his entire stake in Apple Inc.  during the first quarter. Confidence in Cupertino-based company was shaken after it reported its first-ever quarterly decline in iPhone sales and first revenue drop in 13 years in April. Icahn is concerned about the company’s growth in China. But it seems that Icahn still loves Apple, in which he had been a prominent investor. Talking to CNBC’s Squawk Box, the activist investor said “I would get back in if I felt more secure about China” and he thinks that CEO Tim Cook is “doing a good job.” The latest filing submitted by Icahn to the U.S. Securities and Exchange Commission showed that the investor sold around 45.76 million shares of the company during January-March period. During that period, Apple’s stock gained around 3.60%.

Icahn said he sold his stake in Apple because he was worried about the company’s growth in China.

“We made several billion dollars on [Apple]. I don’t think anybody can tell you that China is not going to have a problem, even though it might be a very small one.” According to Icahn, China’s government could “come in and make it very difficult for Apple to sell there… you can do pretty much what you want there.”

Apple Inc Carl Icahn

Apple Disappointing Earnings

For the second quarter of fiscal year 2016, Apple Inc.  posted a decline in its revenue since 2003. The company reported a quarterly profit of $10.5 billion on $50.6 billion revenue, versus a $13.6 billion income on $58 billion revenue in the same quarter last year. The company was able to sell 51.2 million iPhones during the second quarter, compared to 61.2 million in the same period a year ago. In China, the company’s most important market after the United States, sales were dropped by more than a quarter.

Apple’s Future

Wall Street is worried about slow iPhone sales as well as disappointing Apple Watch sales. Analysts at Mizuho Securities believes that Apple should try to acquire a media company such as Netflix or Time Warner. The analysts said a research report that the company should stay away from making a buyout offer for Tesla Motors or Bayerische Motoren Werke AG (BMW), noting that a large acquisition would pose risks.

To offset slow sales in China, the iPhone maker is looking at India where wants to open its own retail stores. But analysts believe that India is unlikely to replace China in the U.S tech giant’s revenue stream. CEO Tim Cook recently made a long trip to India, which was seen as a failure.

Shares of Apple’s stock have been struggling this year. The stock has dropped by 23.18% during the past 12 months.

Apple’s WWDC Starts Monday

Apple Inc.’s big and important event, Worldwide Developers Conference (WWDC) is starting today in San Francisco, California. At the five-day annual conference, the company is likely to announce upgrades to all its device operating systems, including iOS for iPhone and iPad, watchOS, tvOS and OS X for the Mac. In addition to new versions of iOS and OS X, analysts expect that Apple could release new services in TV or streaming music.

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