FeaturedNews

Apple may loose 29% profit globally due to ongoing US-China trade war

According to Goldman Sachs, Apple may loose 29% of its global profit in this US-China trade war. After Trump administration’s ban of US firms selling to Huawei, China may hit back and target will be Apple. China may completely ban the sales of iPhone in the country or it may altogether stop the iPhone production. The risk of later is lower as shutting down Apple’s manufacturing plants in China will affect the economy.

A response is expected from the Chinese government, potentially further rattling markets.
“Investors have been asking us about Apple’s financial exposure to China given the possibility of a ban on Apple’s products there in retaliation for the US license requirements for Huawei that were announced last Friday,” wrote Goldman Sachs analyst Rod Hall in the research note […]
Apple’s profits would plunge by almost 30% if China enacts a total ban on the company’s products, according to Goldman Sachs. The dollar amount would be a reduction in net income by over $15 billion annually.
According to Hall, China represents 17% of Apple’s revenues, but 29% of the company’s profits due to the high-margin products sold there. Given the product mix, Goldman assumes Apple has a 45% gross margin.

Apple boycott movement is already strengthening in China and reports are they might gain more strength.

“Should China restrict iPhone production in any way we do not believe the company would be able to shift much iPhone volume outside of China on short notice, though actions that would push Apple production outside of China could have negative implications for the China tech ecosystem as well as for local employment,” the report said.

Have something to add to the story? Please let us know in comments.

Zia

Zia is the Chief Editor and an Apple products' enthusiast who covers stories about Apple products, Apple's business news and rumors. For tips, typos, and questions contact zia@slashapple.com

Related Articles

Back to top button
Close