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Home / Apple / More iPhone order interruptions and Trump tariffs threaten Apple's holiday season

More iPhone order interruptions and Trump tariffs threaten Apple's holiday season



Typically, Apple's forecast of a record quarter – with revenues between $ 89 billion and $ 93 billion – will be more than enough for tension investors, as the company historically hits or exceeds the high end of its sunny estimates. However, new reports of further iPhone orders and further US tariffs on Chinese-made products bump into a dark shadow over the company, which used falling prices over most of its major product lines and now looks set for a rocky December.

Apple's share has been freefall since its quarterly conference call with analysts, with a reduction of about 20 percent from its record $ 1 billion market capital by falling under the valuation of long-term competitor Microsoft ̵

1; an unmanned development. But Apple is not the only company that feels the pain. Today, a DigiTimes report claims that Apple has ordered "another wave of word reduction in the wake of weaker than expected sales for its new iPhones", forcing revenue shortages and redundancies from its suppliers as component builders and installers adapt to "greater than expected" reduction of orders.

Although there is often a question about the accuracy of DigiTimes reports on Apple, the latest report indicates that competitors are ready to avail of unavailable production capacity at any supplier. In particular, the 7-nanometer chip manufacturer TSMC said to have a number of customers ready to exploit its new production capabilities – a list that includes growing smartphone giant Huawei and chipmaker Qualcomm. Meanwhile, AMD, Nvidia, Broadcom and others are expected to use 7nm chip production space that could otherwise be Apple's.

Tariffs is another major concern. Up to now, Apple has not been strongly affected by an ongoing trade war between the US and China, but it seems to change in the near future. After using an interview to move a 10 percent tariff on Chinese-enabled iPhones and laptops, US President Donald Trump said he was ready to promptly impose the new import fee – and allow a previously charged overall tariff increase from 10 to 25 percent to take place in early 2019. Trump has argued that US consumers will "very easily" handle a 10 percent increase, a position designed to push Chinese President Xi Jinping to make trade concessions.

Due to Apple's increased economic instability, it's hard to know if the latest Apple Watch, iPad, iPhone and Mac price increases were designed to compensate potential US tariffs against China or just to foam early adoptions. However, price increases were global and seem to have a negative impact on the sale of at least some new products in some regions. Reports of weak demand and production cuts have circulated throughout the month and Apple has unexpectedly increased iPhone XR subsidies to Japanese carriers by around $ 100 this week in an obvious effort to increase sales of its most announced new device.

At this time it is unclear whether Apple will continue with its previously announced strategy or correct course to change the gloomy story. In 2007, Apple made the original iPhone's price to stimulate sales, and then adopted pricing of carrier subsidies to attract more customers. But since then, the company has generally weathered annual demands on demand issues without making eye-catching device pricing changes – a choice that eventually brought iPad, Mac and now iPhone device sales to plateau.

Apple may use higher prices for thin crews of customers in stores, originally designed as stores. Instead of following its previous annual strategy of offering new and improved products last year, Apple has offered its latest Series 4 watches, iPad Pros, iPhones and entry level Macs on premieres, in some cases, older models around at their previous prices. The company announced that it would no longer reveal its sales of ethylene for its products, which led to investors concluding that figures were expected to fall.

Losing $ 200 million in market value after the announcement could have shifted the perspective of even the most stubborn Apple executives. We need to see if the company adjusts its strategy or if we are at the beginning of an era where Microsoft again leads the technology industry in mind.


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