Goldman Sachs estimates a three to four percent headwind to Apple's (AAPL) revenue and EPS from the potential iPhone ban in China, analyst Michael Ng said in a note Monday.
Despite the potential ban, which coincides with Huawei's launch of new smartphones, including the Mate 60 Pro, Goldman Sachs believes any direct impacts of the reported government ban should prove minimal.
"State-owned employees only represent about 7.5% of the employed population, implying an up to 1% revenue impact to AAPL given that Greater China represents 19% of AAPL's F22 revenue, though we recognize there may be indirect risks related to spillover effects to consumer demand and geopolitical tension," explained Ng, who has Buy rating and $222 price target on the stock.
"Increased competition from Huawei with the launch of its new phones could prove a headwind, but AAPL's market share gains in the last several years should prove durable given investments into the Apple ecosystem and continued technological competitive advantages," he added.
The Goldman Sachs analyst believes that even if AAPL's iPhone shipments in China declined by ~15 million to the ~32 million annual pace in C2018/19, they estimate a 3-4% headwind to revenue & EPS.
By Sam Boughedda