Apple is comfortably the best performing stock in the Dow Jones this year with a more than 40% rally year to date. Recent gains have been driven by impressive demand for the iPhone 11, but a serious flaw with the screen could pose a risk to this positive dialogue as well as a souring relationship with China.
iPhone 11 Boosts Stock But Screen Issues Are Emerging
Wednesday saw another analyst raise their forecast for Apple stock (APPL), as demand is suggesting that consumers can’t seem to get enough of the new iPhone.
Unfortunately for investors in the Dow giant (which is also significantly weighted in both the Nasdaq and S&P 500), consumers are finding a significant flaw emerging with the new iPhone’s screen. Many purchasers of the new phone have found their screens easily damaged, with deep smudges and scratches forming rapidly. A 21-page thread is developing on the Apple discussions page, kick-started by the following post from MatiasMB,
“My wife and me have put our brand new iphones 11 inside our pocket pants and both screens get scratched the second day of use (mines right in the selfie camera, apple says “without mal function”…). Has someone experimented something similar? We are really disappointed… worst screen ever…”
Another user (simplysimpler) posted the following comment and a screenshot of a bizarre smudge/scratch on their new phone,
“Mine’s more like a finger smear but doesn’t go away. It’s more disturbing than a scratch.”
Ironically, Apple is advertising the iPhone 11 screen as the hardest ever put in a cellphone. Many other users are posting in the forum with identical issues, citing how scratches are appearing out of the blue, and lamenting how much worse this is than prior Apple screens.
Given that APPL has been helping keep the Dow afloat, stock market bulls will be anxiously paying attention to ensure that these issues aren’t damaging the earnings outlook with so much optimism priced into the shares.
Apple Faces Increased Scrutiny In China
The trade war between the US and China is an obvious threat to major Dow tech companies like Microsoft and Apple. However, simple day to day operations for US companies is increasingly becoming a tightrope when it comes to the Hong Kong crisis.
Apple caught the ire of the peoples daily recently, as it was accused of improper practice for offering an app that China believes was being used by protestors to target police. Given how heavily Apple is exposed to China, both in manufacturing and sales, Tim Cook must be extremely careful to toe the line. The removal of the Taiwanese flag from iOS in Hong Kong is one such example of the tech company bowing to pressure from the ruling communist party.