Apple may get into serious trouble in US as its accessories including Apple Watch, AirPods earphones and HomePod speaker, is at risk of being caught up in US President Donald Trump’s most recent proposals to slap a 10% tariff on Chinese imports.
Although the tech group’s iPhones and Mac computers are exempt from US tariffs so far. However, the other devices that produce the bulk of Apple’s multibillion-dollar under the unit of “other products” are exposed to Mr Trump’s terrifying trade war.
In this regard Apple could be forced to raise US prices to pay off for higher duties on the Chinese-made products or take a strike to profit margins.
According to a research note presented last week by analysts at Morgan Stanley, “increasingly heated trade rhetoric between the US and China” as among the “greatest risks” to Apple’s share price in the months leading up to September’s next iPhone.
Apple’s rivals, such as Amazon’s Echo, Google Home and Sonos could also face this issue for their Smart speakers, as well as Fitbit’s smartwatches.
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Apple has got 38% annual revenue growth via its ‘other products’ unit .when iPhone sales growth has slowed, accessories have turned out to be an ever more important source of revenue, with Apple expanding its product line of wearable technology and audio accessories.
On the other side, President Trump’s policy to put levy tariffs on almost all of China’s products shipped to the United States could drastically affect the revenue of Apple.Unless Beijing agrees to a host of comprehensive trade concessions, a dramatic rise that would join American consumers in the infused U.S.-China commercial conflict.
It means China has to narrow the yawning U.S. trade deficit and modify its industrial policies to avoid this tariff on its product.
Vincent Thielke, a Canalys analyst said, “If there was a change in price, obviously that’s going to impact demand”. Moreover, Neil Cybart, an Apple analyst at Above Avalon, forecast “other products” revenues rose 38% to $3.8bn in the quarter, in comparison to iPhone revenues up 17% annually to $29.1bn.