San Francisco (AP) – The Administration of President Donald Trump has planned its tariff dam targeting China will grow Apple in the manufacture of iPhone in the United States for the first time.
But it is an improbable scenario even with American prices which are now held 145% on products manufactured in China – the country where Apple manufactured most of its iPhones since the first model struck the market 18 years ago.
The deterrents for apples change its production at the national level include a complex supply chain that it began to build in China in the 1990s. It would take several years and cost billions of dollars to build new factories in the United States, then face Apple to the economic forces that could triple the price of an iPhone, threatening the sales of torpedoes of its renowned product.
“The concept of manufacturing iphones in the United States is a non-starter,” said Dan Ives, Wedbush Securities analyst, reflecting an opinion largely in the investment community that follows each Apple movement. He estimated that the current price of $ 1,000 for an iPhone manufactured in China, or in India would increase to more than $ 3,000 if production was deployed in the United States and that he thinks that the movement of production at the national level could probably not be made that, as soon as possible, 2028. “The prices would move so radically, it is difficult to understand.”
Apple did not respond to a comment request Wednesday. Cupertino’s company, California has not yet discussed its response to Trump’s prices on China, but the subject could resolve on May 1 when Apple CEO, Tim Cook, must answer analysts’ questions during a quarterly call conference to discuss the company’s results and financial strategy.
And there is no doubt that China’s prices will be a hot button problem since Apple’s share has dropped by 15% and lowered the market value of the $ 500 billion company since Trump began to increase them on April 2.
If the prices are maintained, Apple should possibly increase prices on iPhones and other popular products, because the Silicon Valley supply chain is so highly concentrated in China, India and other foreign markets caught in the cross -fire of the climbing of trade war.
The big question is how much Apple could be ready to maintain the line on its current prices before the results of the prices on the beneficiary margins of the company becomes too much to wear and consumers are invited to assume part of the burden.
One of the main reasons why Apple has a room for maneuver to keep the line on its current iPhone prices while China prices remain in place is that the company continues to collect enormous margins of income generated by subscriptions and other services related to its product, said the Forrester Research analyst, Dipanjan Chatterjee. This division, which raised $ 96 billion in revenues during the last exercise of Apple, remains intact by Trump’s prices.
“Apple can absorb some of the cost increases induced by prices without significant financial impact, at least in the short term,” said Chatterjee.
Apple tried to appease Trump in February By announcing plans To spend $ 500 billion and hire 20,000 people in the United States until 2028, but nothing was linked to the manufacture of an iPhone at the national level. Instead, Apple has committed to finance a Houston data center for IT servers feeding artificial intelligence – a technology in which the company is developing in the context of industry scale.
When he was asked this week if Trump thinks that Apple intends to build iphones in the United States, the White House press secretary, Karoline Levitt stressed Apple’s investment promise as proof that the company thinks that it could be done. “If Apple did not think that the United States could do it, it would probably not have set up this big piece of change,” said Leavitt.
The American secretary for trade Howard Lunick also predicted that the prices would force a quarter of manufacture during an appearance on April 6 on A new CBS program. “The army of millions and millions of human beings screwing small screws to make iPhones, this kind of thing will come to America,” said Lunick.
But during An appearance in 2017 During a conference in China, Cook expressed his doubt that the American work pool had enough workers with the professional skills necessary to do the meticulous and tedious work that Lutnick discussed.
“In the United States, you may have a tool engineers’ meeting and I’m not sure I can fill the part,” said Cook. “In China, you could fill several football fields.”
Trump also tried to put pressure on Apple, in vain, to move the production of iPhone in the United States during his first mandate as president. But the administration finally exempted the iPhone from the prices it imposed on China at the time – a period when Apple had announced a commitment to invest $ 350 billion in Trump’s prices in the United States on China also prompted Apple to start a process that led to some of its current iPhones made in India and some of its other products manufactured in Vietnam.
Cook also took the president during a 2019 tour in a Texas factory where Apple has assembled some of its Mac computers since 2013. Shortly after finishing our, Trump took the factory credit that Apple had opened while Barack Obama was president. “Today, I opened a large apple manufacturing factory in Texas which will bring back very paid jobs in America”, Trump poster November 19, 2019.
