Apple Inc. worries in China continue to grow. Despite Tim Cook’s assertion that the firm’s view on China hasn’t changed, the world’s biggest investors are changing their outlook on the world’s second biggest economy. Ray Dalio, the brain behind the world’s largest hedge fund, says his view on China has changed. There’s “now no safe places to invest.”
Apple saw impressive growth in China in the third quarter. The problem for the firm, and one of the reasons that stock fell by so much after its report was delivered, is that it didn’t really see growth anywhere else. It looks like China may soon slow down, and the world’s biggest phone maker could suffer as a result.
Counting on Apple growth in China
Apple revenue in China in the third quarter ballooned to $13.23 billion, up from $6.23 billion in the same quarter of 2014. The firm’s total revenue grew from $39.8bn to $49.43bn compared to the year before. Growth in China formed more than 70 percent of the firm’s total sales growth.
Tim Arcuri, in a report released just after Apple’s results emerged, was the first to blow the whistle on China. He said that “evidence of a widespread demand reset from China is mounting.” Though the Cowen analyst’s call shook Apple stock, Mr. Dalio’s note will carry much more weight on Wall Street.
Mr. Dalio expects the recent stock market shock in China to echo through the entire economy. “Even those who haven’t lost money in stocks will be affected psychologically by events, and those effects will have a depressive effect on economic activity,” he wrote in his note to investors.