Apple CEO Tim Cook comments on the firm's status in China to reassure investors. (Photo : Reuters)
Tim Cook, Apple Inc.'s chief executive, surprised the public with an unusual move of reassuring stockholders on Monday in statements to CNBC about the iPhone manufacturer's trade in China ahead of a striking 13-percent drop and rebound in its stock price that placed it in a positive stance.
Customers from China are crucial to driving demand for iPhones, and a crash in the country's stock market and Beijing's recent yuan devaluation have made already anxious Apple investors to quiver about the stalling growth in the globe's no. 2 economy.
As China's stocks dropped nearly 9 percent earlier on Monday, Cook did a rare act of commenting on the performance of Apple's business halfway through a financial quarter. Before opening the bell on Wall Street, Cook sent an email response to questions that activations of iPhone in China had increased over the previous weeks.
He added that over the past two weeks, China's App Store had its best position for the year.
"Obviously I can't predict the future, but our performance so far this quarter is reassuring. Additionally, I continue to believe China represents an unprecedented opportunity over the long term," Cook stated in his email.
During the initial minutes of the trade, Apple's stocks crashed as much as 13 percent to a year-low of $92 despite a selloff in the U.S. market. But two hours after, the firm was able to overturn its losses to trade up 2.25 percent at $108.12, adding around $85 billion to the tech giant's market capitalization from its earlier low.
"The fact that (Cook) publicly gave some positive signs around what Apple is seeing out of China during this market meltdown is a huge sigh of relief for investors who have started to have nightmares about what China can become over the coming years for Apple," FBR analyst Daniel Ives said.
Apple's triumphs over the past decade turned it into a top holding for various portfolios, and 3.5 percent of the S&P 500 is attributed to the company, indirectly influencing millions of investors saving up for their retirement through passive index funds.
Worried investors were more anxious last week after a Gartner report was released, showing smartphone sales in the country that fell for the first time in history during the previous quarter.
China's smartphone market is expected to struggle with saturation with less unique buyers, although Apple has continuously acquired market share there.
