Investing.com - Apple led tech lower Friday after Morgan Stanley jumped on the bandwagon of Apple price cuts on fears over a slowing smartphone market in China.
Morgan Stanley cut its price target on Apple (NASDAQ:AAPL) to $236 from $253, citing supply-chain conversations in Asia that revealed a weaker backdrop for smartphone demand. That was the third Apple price cut this week following cuts by both Rosenblatt and HSBC, sending Apple's share price more than 2% lower.
Rising average selling prices and better smartphone quality are leading people to keep their current devices for longer, lengthening replacement cycles, which hurt smartphone makers like Apple, Morgan Stanley said.
The Wall Street bank did, however, provide a semblance of optimism as it said wearables and services revenues could help limit the damage somewhat from the weaker iPhone demand.
In a further sign that Apple's newest batch of iPhones are not selling as well as many had hoped, Broadcom's CEO Hock Tan said strong performance in the company's wireless divisions was driven by demand for older smartphones from a North American customer.
While Tan didn’t mention Apple by name, the iPhone maker is Broadcom’s largest North American partner, suggesting Apple has seen strong sales of older iPhone models, according to Bloomberg.
Chipmaker Broadcom (NASDAQ:AVGO) reported above-forecast fiscal fourth-quarter earnings, but it struggled to hold gains amid a marketwide rout. Its share rose 0.95% to $229.40, down from a session high of $238.28.
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