Apple May Take a Hit From Escalating Trade War

You want to be the pebble in the pond that creates the ripple for change”- Tim Cook

(Source: Wikipedia)

The Building Trade War

On Monday morning, President Trump ordered the United States Trade Representatives to find $200 billion worth of Chinese goods to tariff. China responded by putting a tariff on $50 billion worth of U.S. goods. Trump has since threatened to enact yet another tariff on the country. Such escalation is sparking fear of a “trade war”.

A trade war spells trouble for Apple, a company headquartered in California and who manufactures mostly in China. The United State’s biggest import from China is smartphones, totaling $70.4 billion in 2017. JP Morgan has stated that “A substantial portion of China’s exports are western products manufactured locally — [such as] Apple (AAPL) iPhones.” Almost 20% of Apple’s revenue comes from China, as the company shipped over 41 million phones there. Although Apple has received reassurance from President Trump that they would not be on the list of items subjected for the tariff, the tech company still may be affected.

(Source: Wall Street Journal)

Will Tariffs Take a Bite out of Apple?

Apple has been increasing its inventory by 3.3 billion in preparation for possible repercussions. The company has many rightful worries on when and how they may be affected. Tariffs may affect Apple’s suppliers, causing major delays or a rise in costs. Fear also spawns over the possibility of a repeat of 2016: Apple services being banned by China. In doing so, China could make a huge push for citizens to use Chinese smartphones over American ones. Also, if China were to tax iPhones, prices would rise and Apple would be driven out of the market.

How the Market Reacted

Apple’s stock has slumped since the announcement of the additional tariffs.

(Source: YCharts)

Apple Stock News: New Partnerships Great For America’s Future

Apple Stock News

For the latest Apple Stock News, AAPL closed at $153.29 on Wednesday, May 24th, 2017. It had a loss of -0.33%  from its previous close of $153.80 per share.

Apple has been forming partnerships with community colleges and high schools for their program “learn to code.” The “App Development with Swift,” is designed to teach students how to code with Swift, a coding specific for Apple products.

Perhaps, Apple is implementing this agenda after President Trump’s recent remarks. The President has scolded the US powerhouse for lack of investment on home soil.

The course is a free year-long curriculum for students who might want to pursue future jobs in coding. With the implications of artificial intelligence (AI) and job displacement, middle-class America is dire need of such an initiative.

A snippet of the entire program looks like this:

  • Get Started with Code 1 (Kindergarten to 2nd grade)
  • Get Started with Code 2 (3rd to 5th grade)
  • Learn to Code 1, 2 & 3 (6th to 9th grade)
  • Intro to App Dev (9th to 10th grade)
  • App Dev (10th grade to first two years of community college)

Source: Forbes.

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Apple Stock News: AAPL Working Together with President Trump

Apple Stock News

For the latest Apple Stock News, AAPL closed at $120.08 on Monday, January 23, 2017 with a 0.07% gain, or $0.08 from its previous close of $120.00 per share.

Apple Stock News

(Source: https://goo.gl/F16dQF)

Apple is looking into an investment in the United States after President Trump’s message, “Buy American, Sell American,” is continuously emphasized. Apple Inc. CEO, Tim Cook, continued to show interest after meeting with the President, in which they discussed jobs and incentives. Included in their offer is lower corporate taxes and a discount for repatriation from overseas.

If Apple were to follow through on the plans, they would invest roughly $7 billion with their supplier Foxconn Technology Group to build a liquid crystal display (LCD) manufacturing plant in the United States. The Taiwanese manufacturer, Foxconn, is the biggest contract maker of electronics whose most popular customer is Apple, contributing to 50% of their sales. According to Nikkei Asian Review, Foxconn CEO, Terry Gou, has considered moving production to the U.S. due to improvements in information technology and productivity, and lower energy costs in the states. The panel display facility is expected to create up to 50,000 jobs for Americans which is likely to please President Trump. And to Apple’s benefit, the plant would allow them to update their apple products, including their Macs, iPads, and iMac desktops. The plant could also be forward thinking from Apple to build the next generation of smartphone screens. The United States is the second largest T.V. market, yet has no display factories, posing a huge opportunity for the technology duo.

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Apple Stock News: Apple Manufacturing Expansion into India

Apple Stock News

For the latest Apple Stock News, AAPL closed at $116.64 on Wednesday, December 21, 2016 with a 0.09% gain, or $0.11 from its previous close of $116.95 per share.

Apple Stock News

As we all know, President-elect Trump wants to bring jobs back to America. Apple is one of the companies that Trump has talked about moving their manufacturing back to the United States. In 2013, Apple reinvested $100 million into US manufacturing by strictly producing their MacBook Pros in Austin, Texas. This was a great idea in theory, however; the factory had to train workers and use custom made tools for the production which then negatively affected production. Because of these factors, the factory was much slower than previous factories abroad and the company could no longer meet demand. Movement of their production facilities in general would be a huge expense as well as a hassle.

Recently, Apple is starting to look for expansion of their manufacturing into India, similar to how they produce products in China. Though Trump is trying to shift their gaze to the United States, it seems like Apple isn’t going to change its stance.

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Apple Stock News: Bringing Apple Back for the Holidays

Apple Stock News

For the latest Apple Stock News, AAPL closed at $111.77 on Friday, November 25th, with a 0.49% gain, or $0.54 from its previous close of $111.23 per share.
apple stock news

Black Friday sales have ended but Cyber Monday is just beginning. Apple products being sold from retailers such as Walmart and Amazon are a better place to get the deals. Though Apple doesn’t give amazing deal through their own stores, deals from the other retailers may boost AAPL stock. Regardless of how or where you purchase your iPhone, Apple Watch, Macbook, etc., the purchase itself affects Apple sales, which ultimately affects the stock itself.

Apart from the holiday sales and shopping, Apple is also benefiting from Donald Trump’s new policies, though initially the policies spread fear in the tech world. Trump promised to have Apple and other manufacturers move their production to the United States which means that prices will soar; however, Trump has promised to lower corporate tax in an effort to make manufacturing not only feasible in the United States, but more attractive. He has also promised a tax “holiday” where companies can move their manufacturing back to the United States at a heavily reduced tax rate.

With the holiday sales and the move back to the United States, Apple will benefit heavily, and so will the economy.

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Apple Stock News: Apple Moving Production to the US?

Apple Stock News

For the latest Apple Stock News, AAPL closed at $110.06 on Friday, November 18th, with a 0.10% gain, or $0.11 from its previous close of $109.95 per share.

apple stock news

Apple and China are trying to figure out how to compensate for the possible tariffs President Trump is trying to impose once he is sworn into office. They are studying the effect of what would happen if they move their Chinese assembling back to the United States. Apple has two Chinese Assemblers, Foxconn and Pegatron. Apple asked if they would accompany them in developing a plan to move to the United States. Foxconn, although not enthused, jumped on board with Apple while Pegatron refused to partake in the possible move. The reason being the added production costs.

MIT estimated how much added cost to the consumer would result if Apple moves all production to the United States. If Apple decides to assemble its phones in the U.S. it “would add a negligible $30-$40 to the final cost of an iPhone. (Retrieved from Investopedia)” Manufacturing the components in the U.S. would make the phone $100 more expensive at most. This doesn’t sound like much. Apple’s argument as to why moving jobs to the US would disrupt production is that there are more stringent labor laws. Also the infrastructure wouldn’t be able to keep up with production demands.

Moving Apple production to the United States may take some time. And it may need to be redesigned in order to comply with the United States labor laws. Movement to the US is possible and may not add too much in production costs.

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Apple Stock News: China Tries To Ban iPhone, Apple Backs Out of Republican Convention

Apple Stock News

On June 17th, Apple shares were lower in early trading after a Chinese bureau claimed the United States tech giant may have infringed on patents in their iPhone 6 and iPhone 6s Plus, according to a number of various reports. Shenzhen Baili, a small electronics maker, says the iPhone could be too similar to it’s 100c phone. As a result, Apple could have to halt the sale of iPhones. The company can contest the rule, but had no comment on it’s next move.

Apple Stock News

Apple is putting its foot down when it comes to aiding the Republican presidential convention in Cleveland next month, due to the disputable comments made by Donald Trump. Politico, citing two unnamed sources aware of Apple’s plans, reported on Saturday that the tech mogul isn’t providing technology or funding for the GOP event. Apple said that the remarks that the presumed Republican nominee has made about women, minorities, and immigrants led to the decision. They were asked to confirm the report, but the company declined to comment. Tech firms, including Apple, have supported both the Democratic and the Republican conventions in previous years. In 2008, Apple provided around $140,000 in MacBooks and other tools to the presidential events, says Politico, citing campaign finance records. Tony Romm, a reporter, says that Apple’s political stand against the candidate e traced back to calling for a boycott of the company’s products, and denouncing of CEO Tim Cook, over Apple’s position on encryption.