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Home / Apple / Apple hardware prices will not be affected by recent Chinese import tariffs in the United States [Report]

Apple hardware prices will not be affected by recent Chinese import tariffs in the United States [Report]



Analyst Ming-Chi Kuo has released a new investor note looking at the supply chain for all things. As part of the memo, Kuo said he did not expect the ongoing US-China trade war to affect Apple hardware prices. This is because the US imposes tariffs on imports from China.

Apple has sought to get an exemption from these tariffs, but it has so far been denied. As a result, Apple was suspected of having to raise prices to accommodate the new tariffs, although Kuo believes that Apple will instead speak to absorb the costs itself.

US President Trump said last week that a 10% tariff should be placed on another $ 300 billion worth of products coming from China, starting September 1. However, Kuo believes that Apple made "proper precautions" for that eventuality and that it will "absorb most of the extra costs" for now.

Kuo further believes that Apple's non-Chinese production lines will be able to meet "most of the US market demand" within a two-year period.

1. iPhone. Expanding non-Chinese production capacity is challenging due to the low degree of production automation. We expect non-Chinese manufacturing locations to meet US market demand by 2020.

2. iPad. It is not difficult to expand non-Chinese production capacity to meet US demand due to the higher degree of production automation and the smaller US market share.

3. Mac. Although the degree of production automation is higher than the iPhone, Mac's non-Chinese manufacturing sites could meet US market demand until 2021 due to higher market share in the US market.

4. Apple watch. We anticipate that there will be non-Chinese production sites, starting in 2020.

5. AirPods. We estimate that the change of AirPod's internal design from SMT to SiP will increase the level of production automation.

Regardless, all eyes will continue to be on President Trump and his fight with China. Apple CEO Tim Cook has already suggested that Apple's production efforts are global enough to withstand such tariffs.

(Via: 9to5Mac)

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