MOSCOW, 23 Aug — RIA Novosti, Natalia Dembinski. IPhone sales are falling worldwide, and the company lost: 962 billion to $ 1.2 trillion at the end of 2018. In aggressive trade wars with China, Apple is rapidly losing ground on one of the crucial markets — the Chinese are buying less smartphones, tablets and computers. Trump, meanwhile, seems to have prepared a new blow: he wants Apple went from China, turning the production. Why is one of the largest IT companies in Silicon valley is in danger of becoming a bargaining chip in a trade dispute between Washington and Beijing — in the material RIA Novosti.
In the third quarter, Apple’s revenue fell 13 percent. As for revenues — the company earned almost 54 billion dollars is only one percent more than the year before. However, analysts alerted other: revenue from sales of iPhone, which traditionally has brought her main income, fell significantly. It amounted to $ 25 billion against 29,47 billion a year earlier. For the first time since 2012, sales of smartphones brought the “Apple” of the company for less than half the revenue. The sales volume yoy for the quarter decreased by 12 percent.
One of the key reasons why sales of “Apple” smartphones are rapidly going down — a significant decline in demand in China. The Corporation actually loses this key market.
After the scandal with Huawei ordinary Chinese people began to boycott the “Apple devices”. In addition, in December a Chinese court ruled to prohibit the company to sell seven models of the iPhone in China. The fact that Apple in China is in serious trouble, it became clear by the end of 2018, the year: in the fourth quarter sales of its smartphones there fell from 20 per cent.
The aggravation of the trade war can give the company even greater problems. But Donald trump had previously promised Apple’s CEO Tim cook that the new duties that impose on Chinese goods, will not affect the device and accessories, collected in China by the order of “Yabloko”.
His word he, in General, kept. In August, the U.S. imposed a ten percent tax (and threaten to raise them to 25 percent) on the Chinese import volume of $ 300 billion. But the introduction of tariffs for smartphones, tablets, laptops and other gadgets, US trade representative decided to postpone until December 15.
However, the leadership of Apple is already not sure about anything. The head of the company Tim cook met with Donald trump and tried to explain to him that the imposition of tariffs on Chinese goods will have a negative impact on Apple’s competition with Samsung. The chief competitor will have an advantage because, unlike Apple products, the products of the South Korean company will not be subject to duties when imported into the United States.
As noted by Business Insider, in trying to reason with the White house and warn him of the escalation of the trade war cook met with trump “five times in a year.” “And there are indications that an open dialogue cook with trump went for Apple’s benefit. The company has already received a temporary reprieve from ten percent of tariffs”, — noted the publication.
But 20 Aug trump suddenly said: if he hadn’t helped such companies as Apple, “they would have a big problem.” By “help,” the White house clearly meant a reprieve from the duties. According to him, the “help” he provides, in particular, Apple “will last a very short time”, but because they have to do what you have to go away from China.
The American President reminded that due to the transfer of production by foreign companies from China to other countries China has lost two billion dollars and nearly two million jobs, and have to lose even more.
Trump was unhappy that the Corporation, as reported by the American media, moved the manufacturing of its professional computer workstation Mac Pro from the US to China. Therefore, according to him, now the American authorities “aren’t going to give her any exceptions.”
To protect American consumers from higher prices for their products, Apple wanted to bring production from China — but only partially. As reported in June, the Nikkei Asian Review that the company is exploring the possibility of the withdrawal of China from 15 to 30 percent of the production capacity. And even this step, according to analysts, will cost them dearly — up to 15 percent of revenue.
Trump also obsessed with the idea that all of its devices, primarily the iPhone, the Corporation generally must produce in the United States. “Don’t forget that Apple makes their products in China — he said in January. I said to Tim cook: my friend, you will be doing it in the United States.”
Observers shrug: the idea, maybe good, just do not take into account a number of logistical considerations and economic realities. First, production in the United States will significantly increase production costs. And besides — where do we get so many components for Assembly outside China.
For the giants of Silicon valley such an attitude trump does not Bode well. According to conservative estimates, the transfer of production to the US would cost her $ 40 billion. After the unexpected “tariff” threats to the market value of Apple immediately dipped to $ 42 billion. And, apparently, this is only the beginning.
Weak smartphone sales are already dragging the business down. The interest in iPhone it tries to compensate for the continuing growth of its business to digital services. But, as analysts notice, it falls into a vicious circle. The services sector, which counts Apple and sales of its other devices directly connected to how many customers will remain in the Apple ecosystem, and the latter just depends on iPhone sales.
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