Apple bears proven wrong yet again as iPhone defies China slump narrative
Memory shortage. We are far behind in artificial intelligence. Tariff issues. None of this seems to matter to Apple. It continues to sell tons of iPhones and beat expectations, especially in China. According to research firm Counterpoint, iPhone sales in China are up 23% in the first nine weeks of 2026; in contrast, there was a 4% annual decline in the entire smartphone market. “It’s the exact opposite of what everyone is saying,” Jim Cramer said Thursday; So much for the idea that Apple is losing share in its second largest market and can’t compete. The technology giant has once again proven the skeptics wrong; as did the holiday quarter, when Greater China revenue overall rose 38% to $25.53 billion, beating estimates by nearly $4.7 billion. iPhone had its best quarter ever in China, thanks to enthusiasm for the iPhone 17 series, record upgrades, and double-digit percentage growth of switchers. Memory Apple has attracted more customers in China this year as it holds the line on pricing, according to Counterpoint’s report on Thursday. Chinese competitors have been forced to raise prices to reduce the rising costs of memory going into devices. The explosion of artificial intelligence has caused a massive memory shortage worldwide. Smartphones contain memory chips that allow them to multitask and function, as well as storage memory for the operating system, apps, photos, and files. “Maybe this is a sign [Apple’s] better [at] That was certainly the case in Apple’s December quarter, Jeff Marks, the Investment Club’s director of portfolio analysis, said on Thursday’s Morning Meeting. We’ll see what happens when Apple reports its current March quarter results in about six weeks. Going forward, we see three reasons why Apple will have an advantage over its competitors. Strong margins across the company could help Apple cover costs. Even a short-term hit to hardware profits (that hasn’t happened yet) could be a decision. It’s a strategic trade to bring new iPhone users into Apple’s ecosystem to boost long-term revenues in its increasingly important high-margin services business. Apple signed long-term memory contracts with suppliers well in advance, allowing Apple to lock in lower prices before prices rose. On the latest earnings call, CEO Tim Cook gave a brief nod to this notion: “As always, we’ll look at a range of options to deal with this,” he said. TSMC is too big to ignore. It’s a big risk to gamble billions of dollars on sales for a smaller tech company when you can rely on Apple’s hardware cycles. AI Memory isn’t the only way Apple is going to overcome the negativity and silence the skeptics. Apple’s AI journey was surprising and underwhelming after high expectations. Since then, trying to implement AI in-house has run into problems, from feature delays to key staff departures. In January, Google and Apple announced a multi-year partnership in which Google’s Gemini AI and cloud will power Apple’s AI capabilities, including the super-intelligent Siri. Jim Cramer previously said: “This is a great opportunity to realize that by signing with Gemini, they are getting the best AI.” Plus, Alphabet’s Google still pays a fortune for search priority on Apple devices. Last month, Tariffs Apple also previously addressed President Donald Trump’s tariffs. Cook has turned to the administration’s positive side, especially after Trump threatened to impose a 25% tariff on iPhones made abroad last May. Apple announced a $100 billion commitment to U.S. manufacturing in August, in addition to the $500 billion investment it has committed to over the next four years. After all, as Jim has said in the past, the company makes the “best product in the world” with the iPhone as its biggest moneymaker. The club has a hold-equivalent 2 rating on the stock. Our price target on Apple is $300 per share, implying roughly 20% upside from Thursday’s close. (Jim Cramer’s Charitable Trust is long AAPL, GOOGL. See here for a complete list of stocks.) If you subscribe to the CNBC Investment Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a transaction alert before buying or selling a stock in his charitable foundation’s portfolio. After talking about a stock on CNBC TV, Jim waits 72 hours before executing the transaction. THE TERMS AND PRIVACY POLICY DO NOT EXIST OR SHALL BE CREATED BY THE TERMS AND CONDITIONS. NO SPECIFIC RESULT OR PROFIT CAN BE GUARANTEED.
