Apple chief executive Tim Cook halted a 13pc drop in the tech giant’s stock on Monday after taking the unusual step of emailing a media organization to reassure investors about the business’s Chinese operation.
With Chinese stocks plunging close to 9 %, Apple shares slumped as much as 13 % to a year-low of $92 amid a sell-off in the broader US market.
Mr Cook took the rare step of commenting on the health of Apple’s business midway through a financial quarter. He wrote to CNBC to reveal that iPhone activations in China had accelerated over the past few weeks.
He also said the App Store in China had its best performance of the year over the past fortnight.
“Obviously I can’t predict the future, but our performance so far this quarter is reassuring. Additionally, I continue to believe China represents an unprecedented opportunity over the long term,” Mr Cook wrote.
Apple’s shares then reversed its losses to trade up 2.25pc at $108.12, adding around $85 billion to Apple’s market capitalization from its earlier low.
Chinese consumers are critical to fueling demand for iPhones, and a slump in the country’s stock market and Beijing’s recent devaluation of the yuan have shaken Apple investors already worried about slowing growth in the world’s second largest economy.
Apple’s success over the past decade has made it a top holding for many portfolios and it accounts for 3.5pc of the S&P 500, indirectly affecting millions of investors saving for their retirements through passively invested index funds.
Many on Wall Street remained cautious about risks Apple faces in China’s potentially stumbling economy. After Monday’s rebound, Apple’s stock was still down about 19pc from its record high close set in February.
China’s smartphone market is widely believed to be close to saturation with fewer first-time buyers, although Apple has continued to gain market share there.
