Apple has come to take a breather from the pressure on tariffs. This is because U.S. President Donald Trump signed a trade agreement with China and delayed tariffs on China.
“If President Trump didn’t approve it, Apple would have been hit hard,” Bloomberg quoted Dan Ives, an analyst at Wedbush Securities. There was a possibility that Apple’s iPhone 11 will add 150 dollars (180,000 won) in tariffs.
The U.S. planned to impose an additional 15 percent tariff on Chinese products worth 156 billion dollars on July 15. Targeted items also included Apple products such as iPhone and iPad.
If the agreement between the U.S. and China failed, Apple in China will face tariffs which would result in price losses. The company has its parts and manufacturing partners in China,
“President Trump delivered an early Christmas present to Apple,” analyst Dan Ives said. “If Apple had been burdened by tariffs, it would have reduced its earnings per share by 4 percent in 2020.
Apple has avoided tariffs due to the U.S.-China agreement, but it is still in an unstable condition. Most parts suppliers and manufacturing suppliers are based in China because of trade between the United States and can not easily get over the effects of conflict.
Tim Cook, Apple CEO has been aggressively lobbying against the U.S. government. Trump reportedly frequently meet and spoke with the CEO for the year 2019.
Apple iPhone shipment to China declines further
Meanwhile, Apple’s iPhone shipments to China marked the second consecutive month of double-digit decline, a survey showed Wednesday. It fell more than 35 percent in November.
The company said it has been suffering from a double-digit decline in shipments for the second month since October due to sluggish sales of the iPhone 11. Shipments of iPhone to China dropped 7.4 percent between September and November, according
Apple’s market share in China in the third quarter of this year decreased from 7 percent to 5 percent.
Wedbush Securities analyzed that if Apple couldn’t avoid the tariff burden, its per-share net profit would have fallen 4 percent next year. He also stated that even if Apple raised product prices to offset the tariff burden, sales could still drop by 6-8 percent.
Meanwhile, Tim Cook stated in recent interview his and the company’s desire to focus on AR development.
