Apple Inc. (NASDAQ:AAPL)’s status as a fashion icon is at risk, as per analyst Colin Gillis of BGC Partners. Gillis said on CNBC’s “Power Lunch” that some “disturbing” data points may have put Apple’s position as a fashion icon at risk.
Could lose its “fashion icon” status
Gillis noted there are some data points, suggesting the iPhone 7 may not resonate well with customers the way investors are expecting it to. And, one such data points is a recent research about China, where Apple’s smartphone growth declined nearly 32% over the past year. In terms of market share, this places the US firm in the fifth place as local vendors like Oppo, Vevo, Xiomi, etc. saw more growth, as per IDC.
Gillis said that amid slowing smartphone market, it is a point of concern. Gillis also said that it is not likely that Apple’s growth is going to continue forever. “This market could stall out,” the analyst noted. And, if the next iPhone offers nothing new, then there are good chances that Apple will lose its status as a “fashion icon,” said Gillis.
“If you think of what company in tech is as close to a fashion status symbol, it’s Apple,” Gillis noted.
Small data points must not be overlooked
After retailer Target posted a double-digit same same-stores sales drop on electronics, which included a visible drag due to 20% decline in Apple products’ sales, Apple Inc. (NASDAQ:AAPL) has faced a fresh scrutiny. But, Gillis note that for a brand like Apple, sales of Target is just a “blip,” and “just a little tiny data point across the global landscape.”
On a recent conference call, Target CEO Brian Cornell told “Our guests come to us looking for those products. They’re looking for the newness and the innovation.” Cornell said that they are putting together plans with the iPhone maker and our merchandising teams to make sure that they are ready to take benefit of that in the next half of the year.
Even though the decline at Target is not much “significant” for the tech giant, but it could raise the stakes even higher for the Cupertino-based firm ahead of the upcoming iPhone 7. The iPhone 7 is rumored to debut next month.
Hedge funds dumping Apple
Separately, Hedge funds removed billions of dollars’ worth of Apple Inc. (NASDAQ:AAPL) stock during Q2, as per the data collected by S&P Global Market Intelligence. The most recent 13F filings from the top hedge funds were examined by the S&P Global Market Intelligence, and they found that during Q2, hedge funds removed $5.3bn worth of Apple stock.
Hedge funds unloaded around $6.3bn worth of shares in the tech sector, as per Barron’s. This means that Apple’s stock sales made up about 84% of the net selloffs within the sector. Apple’s stock has rallied in a big way, so this does seem a little strange. But as per S&P analysts, hedge funds dumped the shares because they wanted to lock in those profits for the investors.