China, which was an afterthought for Apple once-upon-a-time, has become the company’s second biggest market.  In the second fiscal quarter, Apple generated $7.9 billion of revenues from China.  This amount was more than three times the revenues a year earlier.  As a reference, Apple’s total revenues were $39.2 billion.

A large number of Apple bulls expect Apple sales in China to accelerate, but the data do not support such expectations.

Applied Materials (AMAT), the big semiconductor equipment company, lowered its earnings estimates on Tuesday, citing a slowdown in China. Yesterday afternoon the whole stock market fell out of bed when Cummins (CMI), a truck engine maker, lowered its forecast. One of the reasons given was a slowdown in China.

The day before yesterday after the market closed,Advanced Micro Devices (AMD) lowered its forecast attributing it partly to China.

Previously, Yum (YUM) told us that it was not selling enough chicken in China and McDonald’s (MCD) told us it was not selling enough hamburgers.

Apple products are aspirational products.  It is not uncommon for Chinese middle class youth to save money for the specific purpose of buying Apple products. Certainly a case can be made that Chinese may be buying less fried chicken but they will still buy iPhones and iPads.

Macroeconomic data out of China are not encouraging. The Chinese economy is slowing rapidly.   As China slows, the risk to Apple’s stock price increases.

Economic indicators can be broadly divided into three categories: the lagging indicators, the coincident indicators, and the leading indicators. I focus on the leading indicators from 23 countries….Read more at Forbes