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Apple predicted to absorb iPhone, iPad, Mac cost increases from tariffs




Listed Apple analyst Ming-Chi Kuo believes any tariffs implemented by the US won It has no impact on Apple's prices due to the supply chain implemented by Apple CEO Tim Cook, and Because of that advance planning, there will be no impact on Apple's broadcasts.

  Apple CEO Tim Cook

Apple CEO Tim Cook

In a note set by AppleInsider Ming-Chi Kuo states that the market is worried about the demand for Apple products due to high prices is excessive. Kuo believes Apple has prepared for the event provided by Cook's guidance, and should the 10% tariff be delivered "Apple will absorb most of the additional costs due to tariffs, and the prices of hardware products and shipping alerts for the US market will remain unchanged." [19659007] It would have a negative impact on profits if Apple were to pay the cost increases, Kuo said. He also believes that some of the impact will be dampened over time by Apple's transition to non-Chinese production sources, such as expansion in India, or production in Vietnam.

Kuo believes non-Chinese iPhone, iPad and Apple Watch production could meet US demand by 2020. Mac is another matter, with production outside of China not expected to meet US demand by 2021.

  Production shifts predicted by TF Securities and Ming-Chi Kuo

by TF Securities and Ming-Chi Kuo

In a series of tweets on August 1, President Trump promised a 10% tariff application on toys, games and consumer electronics. The tweet was in response that China apparently did not heed to promises to buy "large quantities" of US agriculture, forcing the move from the US.

The tariffs are not the 25% that the president said he would apply for in May, but was finally not used. Tariffs are not generally absorbed by companies like Apple, Sony, Microsoft and others, nor are they paid by Chinese companies. As a general rule, companies affected by these tariffs, including Wal-mart, have historically passed the costs on to US consumers of the goods.

It is not yet clear why Kuo made the assumptions, given Cook's own remarks on the matter. During the conference call after the earnings, Cook specifically asked analysts not to trust reports that Apple was moving production out of China.

During that revenue call, Cook also said that Apple wanted to continue producing Mac Pro in Texas.

"As for the exceptions, we've made Mac Pro in the United States, and we will continue to do that," he said, "so we are currently working and investing in the capacity to do so, because we will continue to be here. ”


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