Goldman Sachs: 3 Reasons Apple Is Struggling In China

Goldman Sachs, in a note released Tuesday, outlines what it believes is the cause behind Apple Inc. AAPL's downfall in China.

• Tourism from China to Hong Kong is down 15 percent in Q1. iPhone sales in Hong Kong are highly correlated with Chinese tourism to the city.
• Marketshare was given up to third parties suggested by a low upgrade rate.
• A decline in units added at high end carrier China Mobile versus lower end carries China Unicorn and China Telecom. Goldman Sach notes this doesn't suggest the iPhone is losing out in the high end of the market.

Related Link: Apple's iPhone 7 Cycle Is Looking Very Familiar

Goldman Sachs views the $1 billion investment in Didi (Uber of China) as a positive and is looking forward to iTunes Movies and iBooks becoming available again, among the iPhone 7 release. The firm as a $136 price target based on 12.5 times expected 2017 EPS.

Shares of Apple gained 3.7 percent Monday to $93.88. It was ticking up about 1 percent in Tuesday's pre-market session.

The stock opened 2016 trading above the $115 level.