Apple Inc. (NASDAQ:AAPL) might have clocked a milestone $700 billion market cap in recent trading sessions, but that seems to be fading away as the stock has resorted to trading on the downward trend. CNBC’s Fast Money crew argues it might be high time that investors started recouping some of their investments in the stock as imminent competition from China’s Xiaomi continues to threaten Apple’s dominance of the space.
Apple Inc. (NASDAQ:AAPL) may be the biggest company in the world in the consumer electronic space, but a resurgent Xiaomi is threatening the company’s future prospects on high-end products. Despite the recent slump in the market, research firm Specific, Crest maintains a sector perform rating on the stock while emphasizing investors should reduce their exposure.
The Chinese growth story that Xiaomi has tapped into with success remains another headwind for Apple Inc. (NASDAQ:AAPL) going forward according to CNBC’s Brian Kelly. The analyst believes it may be high time that Apple’s investors slashed their investments in the stock by a third.
“When you start to look at the sales numbers to get double digits sales growth you are going to need that overseas growth, so this is a challenge for Apple. Doesn’t mean the story is over, but it is certainly a challenge especially if you can get margin compression or margin expansion where Apple Inc. (NASDAQ:AAPL) doesn’t earn as many dollars per dollar put in. That is going to be a challenge for Apple,” said Mr. Kelly
Xiaomi is poised to be the biggest threat to Apple’s dominance of the consumer electronic space according to Mellissa Lee, based on the fact that it manufactures smartphones, tablets and has a fitness band. The Chinese company is also investing $1 billion in acquiring TV content in addition to investing $300 million in a video streaming platform backed by Baidu as it seeks to diversify its operations.
The Chinese population according Timothy Seymour should be another concern that investors at Apple should be worried about going forward.
“I think they have a lot to worry about Xiaomi. I think the Chinese consumer is not something that Apple Inc. (NASDAQ:AAPL) is going to have the same success in but in other ends I think they will,” said Mr. Seymour
Pete Najarian believes investors have a right to be concerned about Apple on the fact that it has not specified when it is to release its iWatch. In the wake of Xiaomi reportedly shipping over 1 million of its fitness band.
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