CNBC’s Jim Cramer is bullish about Apple’s iPhone potential in China.
The tech titan has been a focal point of the trade war between the United States and China, but the dispute reportedly has not damped Chinese consumer interest in the latest iPhone launch that hit stores worldwide on Friday. Demand for the cheaper of the three iPhone 11 models in China has been much stronger than what noted Apple analyst Ming-Chi Kuo predicted.
“Sure, the trade war’s taking its toll on business … it’s just not taking its toll where it was supposed to,” the “Mad Money” host said Friday. “That’s why I’m a lot less worried about how the iPhone 11 will sell in China … I’m actually excited about Apple’s prospects in the People’s Republic.”
The United States and China have volleyed multiple rounds of tariffs on billions of dollars worth of goods on imports from one another. Worried investors have tried to gauge how tariffs would impact production costs and sticker prices of implicated companies. Businesses that make products in or rely on imports from China were expected to pass higher production costs on to consumers, in turn hampering growth.
President Donald Trump instigated the trade dispute with the goal of reducing the U.S.’s trade deficit with China, prevent theft of intellectual property and to end forced technology transfers.
Despite a 25% tariff on steel, which was intended to address China’s out-sized steelmaking capabilities, steel prices have fallen on weaker demand and excessive supply from American producers, Cramer highlighted. Procter & Gamble is seeing sales growth in China, he added. Starbucks is opening stores in the country and demand is strong, he continued.
“If you look at how well all of these American brands are doing in China, it’s hard to take the doomsayers seriously when they start writing off the iPhone 11 in the PRC before it’s come out,” Cramer said. “The lesson from these other products is that if Apple prices the new phone correctly — and I think they are — the numbers could be much higher than we expect.”
WATCH: Cramer breaks down iPhone, trade war sentiments
Disclosure: Cramer’s charitable trust owns shares of Apple.
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