The strengthening of the U.S dollar is now a point of concern to Apple Inc. (NASDAQ:AAPL) as the demand for iPhone 6 continues to near fever pitch. The strengthening of the U.S dollar according to UBS’s, Steve Munovich, will have strong bearing on the company’s full-year earnings. During an interview on CNBC, Munovich reiterated that the downturn in Russia’s economy will not have any effect on Apple’s earnings as the country accounts for less than 1% of iPhone’s total sales.
“Strong Dollar probably hits revenue Growth to about two points that’s what Apple was more less saying last October now it could be three or more points so the multinationals get hit there,” said Mr. Munovich
Munovich reiterates that the demand for Apple Inc. (NASDAQ:AAPL)’s iPhone 6 and iPhone 6 plus is currently high in emerging markets with China commanding a greater chunk of the total sales. The analyst remains confident that the Cupertino-based company can get through the current economic slowdown in a number of countries with impressive sales.
Low oil prices have gone to affect a number of countries especially in Eastern Europe and Latin America arousing fears that increasing interest rates in this countries could affect customers purchasing ability going forward
“We’ve been carrying about 16% revenue growth for Apple Inc. (NASDAQ:AAPL) I guess if people in those currently really don’t buy much of anything. You could see that in 10 to 12% range. [..] Aside from China there is not tone of emerging markets exposure because Apple is tending sales here to more affluent customers,” said Mr. Munovich
Apple has always had a good problem on its hands of trying to meet demand whenever it releases a new model especially for its flagship iPhone device. The release of the iWatch next year is another avenue that is expected to have an impact on the company’s earnings going forward. The fact that Apple Inc. (NASDAQ:AAPL) does not expect most of its sales to come from emerging markets means the company remains safe taking into consideration the ongoing slowdown in economies especially in emerging markets.
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