Analysts from the Bank of America Merrill Lynch have released a research note asserting that Apple may be on the receiving end of an "informal boycott" from Chinese consumers. They claim the boycott could be a reaction to recent US trade policies and tariffs which are leading to "a general redirection of Chinese demand away from US products".
The analysts think the cooling of Apple sales revenue – which recently led it to slash its 2019 sales forecast – is due to this informal boycott in the region. "According to a survey conducted by our colleagues in equity research, consumers in China and India are showing less interest in upgrading to an iPhone and more interest in upgrading to Xiaomi and Samsung," explained Ethan Harris and Aditya Bhave, economists with the Bank of America Merrill Lynch.
The analysts posit that Apple's high-profile nature has led to its inclusion in many political conversations revolving around the US-China trade war, making it an easy target. "Given the battles around high tech, this spillover from politics into sales could be particularly high in the cell phone market," argued Harris and Bhave.
The trade war launched by the Trump administration has led to a slowdown of the Chinese economy over the last few months. However, Harris and Bhave believe that this most recent incident is indicative of an impending switch.
"The upshot is that while China is currently slowing faster than the US, by the spring we expect growth in China to start to pick up, even as the US continues to slow down.
"Everyone loses in a trade war," they added.