Apple left without a raft of life in the middle of the Trump trade war: analysts

Although the 90 -day break from US President Donald Trump on many of his “reciprocal rates” has given certain companies and investors a respite, the biggest American company, Applewas not so lucky.

The Cupertino -based technology giant depends strongly on the supply chains in China, which has seen its direct debits will only reintegrate, the American cumulative rate rate on Chinese products now at 145%.

Thus, despite the American commercial situation which seems more promising for a large part of the world, experts say that the American-Chinese negotiations remain the most important variable for Apple.

“Apple could be fell for many years by these prices,” said Dan Ives, a global technology research manager at Wedbush Securities, in CNBC, adding that the company had “returned its boat to the ocean without life rafts”.

The manufacturer of smartphones has diversified its supply chain in China for years, but out of the 77 million iPhones it sent to the United States last year, almost 80% came from China, according to OMDIA data.

The research firm focused on technology estimates that by virtue of current prices, Apple could be forced to increase its prices on phones sold in the United States from China by around 85% in order to maintain its margins.

“When the original prices in China were 54%, this kind of impact was serious, but manageable … But, it would not have a financial meaning for Apple to increase prices according to current prices,” said Xuan Chiew, research director at Omdia.

Apple would have sent 600 tonnes of iphones, or up to 1.5 million units, from India to the United States before Trump’s new prices took effect, according to Reuters and the Times of India.

Apple and two of its iPhone producers did not respond to a CNBC survey.

Chiew said that if this news is not confirmed, storage would have been the best option for the company quickly reduced price impacts and would buy a little time.

However, it is not clear how long such stocks could last, especially since consumers are increasing iPhone purchases in preview of higher prices, he added.

According to OMDIA, Apple’s medium -term strategy has been to reduce exposure to geopolitical risks and related to prices, and it seemed to focus on increasing iPhone production and India exports.

Trump’s temporary judgment will likely pushing India prices to a basic line of 10% – at least for the moment – giving it a more favorable entry in the United States

However, the accumulation of iPhone manufacturing in India has been a process of several years. Indian iPhone manufacturers have started to produce high -end models of Apple’s iPhone Pro and Pro Max for the first time last year.

According to Chiew, sufficient production of production in India to meet the demand could take at least one or two years and is not without its own tariff risks.

Faced with prices, experts have said that the best option of the company is likely to please the Trump administration for a pricing exemption for imports from China while it continues to strengthen its diversification efforts.

This is something that the company had received – to some extent – during the first Trump administration, some analysts thinking that this could happen again this time.

“I always see a potential relief that can take the form of concessions for Apple according to its American commitment of $ 500 billion,” said Daniel Newman, CEO of Futurum Group. “It has not been much discussed – but I am optimistic that companies that commit to us have a certain form of relief as negotiations are progressing.”

Apple said in February that it would invest $ 500 billion in the United States, creating 20,000 jobs.

However, Trump has been clear that he thinks Apple can make iPhones in the United States – although analysts have doubts about the level. Wedbush Ives analyst predicted that an iPhone would cost $ 3,500 if it was produced in the United States instead of the more typical $ 1,000.

Meanwhile, other analysts say that even a commercial agreement or a tariff exemption may not be sufficient for Apple to avoid the unfavorable commercial effects.

“Suppose there is at least one thaw to come, either in a moderation of reciprocal prices, targeting China or in a special exemption for Apple,” said Craig Moffett, co-founder and principal analyst of the research publisher on actions Moffettnatnathanson.

“This would still not solve the problem. Even a basic price of 10% poses a huge challenge for Apple.”