Apple investors have praised CEO Tim Cook for his handling of Chinese trade relations after the company’s stock hit an all-time high recently.
Reuters reports that Wall Street analysts had low expectations for the firm recently, expecting the company to post lower full-year revenue compared to last year and flat fiscal fourth-quarter sales, but instead the company’s stock price has hit an all-time high. Investors are pointing to the company’s CEO Tim Cook and his handling of Chinese relations to explain the firm’s success.
Cook has developed a relationship with President Donald Trump and has advocated Apple’s views on tariffs and U.S. manufacturing to the President. Cook has also managed to maintain strong relations with Chinese officials, which has prevented Apple from becoming a target of retaliation following the U.S. government’s move to cut Huawei Technologies Co. out of the American market.
Cook was recently named the chairman of a top Chinese business school.
Hal Eddins, chief economist for Capital Investment Cos, an Apple shareholder commented on Cook’s performance as CEO stating: “Who would have thought he would have been able to thread that needle and deal with the president? It’s a show of an incredible amount of nuance and emotional intelligence to do what’s best for the company.”
Apple’s share in the Chinese market fell to 5.2 percent in the third quarter, down from 7 percent a year ago. Chinese firm and Apple competitor Huawei saw its market share jump dramatically from 24.9 percent last year to 42.4 percent this year in the country.
Tom Plumb, founder of Wisconsin Capital Management, another Apple shareholder, stated: “A year ago, we were talking about the price pushback in China, and (Apple) contended they were overcoming that. Now the real question is whether you’re seeing a cultural shift that would bode poorly for Apple.”
But many Apple investors have likely expected a loss in the Chinese market for some time and are prepared to deal with it in the long term. Erik Gordon, a professor at the Ross School of Business at the University of Michigan stated: “If the industry is worth being in, you should assume that over the course of time it’s going to be dominated by Chinese national champions.”