Apple's profits may be affected by weak demand in China, warns Goldman

According to Rod Hall, an analyst at Goldman Sachs, macroeconomic conditions in China could weigh on demand for new iPhones.

In a note to customers, Hall wrote Sunday to his customers that he saw "multiple signs of a rapid slowdown in consumer demand in China," which could affect Apple Inc.'s results. consumer demand continues and affects the high-end smartphone market, he said, Apple

AAPL, -1.85%

find it hard to exceed Wall Street's profit forecasts.

Hall is particularly concerned that Apple's earnings outlook for the December quarter is disappointing, as it expects the company to provide conservative forecasts while learning more about Chinese market conditions. The smartphone maker has announced its results for the September quarter on Nov. 1 and is expected to provide feedback on the Chinese market during its call for results.

Apple stocks are down 1.5% in Monday morning trading.

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One of the strengths of Apple is that the new iPhone XS Max has a 6.5-inch screen, while that of the iPhone XR is 6.1 inches. These give Apple an entry into what Hall said is still a growing category in China. Before the launch of the Apple product last month, the company had no phones with a screen of 6 inches or more.

"This could at least partially offset negative macroeconomic indications, although we doubt that the problem will be solved completely if Chinese consumer demand continues to be weak as we move through the critical season of holiday shopping," said Hall.

Still, he predicts that Apple will continue to lose market share in the high-end smartphone market. According to his estimates, each loss of market share of 2 market points equates to about one million units sold.

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Apple's latest iPhone range also offers devices with dual SIM capabilities, which should attract the attractiveness of China.

Hall has a neutral rating on Apple stock and a target price of $ 240. Apple's stock rose 39% in the last 12 months, while the Dow Jones Industrial Average

DJIA, -0.17%

increased by 11%.

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