Apple iPhones are too expensive, hedge fund manager says

Apple is blaming weak iPhone sales largely on China’s slowing economy, but Dan Niles, a hedge fund manager at AlphaOne Capital, said the real problem is that the company’s flagship product is too expensive.

“The real issue is that they’re trying to sell a Ferrari in a market that can afford a Ford,” he said during an interview with FOX Business’ Maria Bartiromo on Monday.

After slashing its revenue guidance by several billion, Apple CEO Tim Cook blamed weak iPhone sales on China's slowing growth rate.

However Niles, who predicted Apple’s challenges in October, said the iPhone maker is losing market share because they are trying to sell two phones above $1,000 in an emerging market.

“Their [average selling prices] were up 28 percent year over year in September to $793,” he said. “That’s a lot to be pushing into a market when you’ve got China who’s GDP per person is sitting at $10,000, and in India it’s at $2,000, that’s in contrast to the U.S. at over $60,000.”


In his opinion, Apple has also been losing market share in China due to increased competition.

“They actually went from the second-largest vendor in the world, Huawei passed them out of China to become the second largest, and now you’ve got Apple, Vivo, and Xiaomi which are three vendors also in China sitting at 9 percent or so a share and Apple is at 11 [percent],” he said. “Those three could pass Apple just next year.”

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