Following the US-China trade war, Trump government blacklisted Huawei Technologies Co. last week. This move may give birth to other effects as the trade war intensified. A leading global investment banking firm estimated that “Apple’s earnings would take a 29% hit if China were to retaliate against the US with a ban on sales of Apple products.”
According to analysts like Rod Hall, “While Goldman takes no view on the likelihood of a potential ban, such a restriction would represent 100% of estimated Apple earnings exposure to both mainland China and Hong Kong, assuming some offsetting impact from cost savings in sales and marketing.”
Apple Stock Fell 0.5% in US Pre-Market Trading
Notably stock fell 0.5% in the US pre-market trading. This bitter trade relations between the two superpowers has raised another concern of Huawei’s partnerships with US chipmakers, software, and component suppliers.
Apart from the latest XMM modems, which are manufactured by Intel Corporation in the US, all the significant components, including A-series chips, memory, and display, are made in Taiwan and outside China.
Rest of the iPhone supplies coming from mainland China; in this situation, if China restricts iPhone production, Apple won’t be able to move many volumes outside the country on short notice, believes Goldman.
Apart from its business implications of trade relations, there is strong emotional learning among Chinese consumers towards the native phone brand. As per the latest reports, Apple fanboys in China are ditching iPhones and turning to Huawei P30, which is claimed to be faster and can take better pictures.
Apple has been facing a lot of issues in China, and therefore, the company has started exploring newer horizons in India, which is the second largest smartphone market in Asia. To this effect, Apple is planning to set up a retail store in an upscale location in the heart of Mumbai, the financial capital of India.
That’s all friends!
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