Apple predicted to absorb iPhone, iPad, Mac cost increases from tariffs

Mike Wuerthele for AppleInsider:

Apple analyst Ming-Chi Kuo believes that any tariffs implemented by the US won’t impact Apple’s pricing because of supply chain moves implemented by Apple CEO Tim Cook, and because of that pre-planning, there won’t be any impact to Apple’s shipments.

Kuo believes that Apple has pre-prepared for the event given guidance by Cook, and should the 10% tariffs be supplied “Apple will absorb most of the additional costs due to tariffs, and the prices of hardware products and shipment forecasts for the U.S. market will remain unchanged.”

There would be a negative impact on profits should Apple shoulder the cost increases, according to Kuo. He also believes that some of the impact will be mitigated over time by Apple’s shift to non-Chinese production sources, such as expansion in India, or production in Vietnam.

MacDailyNews Take: Obviously, profit margins would take a hit, but that’s one of many benefits of Apple having such healthy margins.


      1. Apple almost always absorbs exchange rate fluctuations, except in extreme events, like when Russia’s currency plummeted years ago, they suspended sales at Apple Stores, as Russians were buying iPhones, then shipping them out because obviously the cost of Russian iPhones had dropped in rubles.

        That’s why Apple typically prices products at slightly higher than the US exchange rate equivalents, in order to absorb small daily price fluctuations. Unlike gas prices which can be adjusted daily, large manufacturers typically try to hold the line on retail price adjustments. Like automobiles. Typically, auto mfrs only adjust pricing once a year.

  1. Because people aren’t going to pay any higher prices for Apple’s products, IMHO. I’m very unhappy with myself for spending $3,400 or so on the newly refreshed (the first time) 2018 MBP. Apple snookered me (us) by making them obsolete almost immediately and then did it again with another near immediate refresh. I don’t believe those were mistakes but carefully calculated “stick it to the man” business decisions designed to devalue these brand new 2018 MBPs on the used market. I’d really like to see a comparison article about their resale values compared to previous models a year later. I despise this machine mostly because I’m pissed off about being taken advantage of. There. I said it!

    1. This, in turn, will prompt other Asian nations to devalue their currencies so their sweatshops remain competitive. Which could trigger a worldwide currency war. The US, which has massive debt and very little room to maneuver rates, could be triggered into recession quickly as the rest of the world drives their bargain-seeking investments to Asia. Wall Street will profit from the sell offs and trades, while US manufacturing and workers take it on the chin. Of course, Trump may just fold like the fat playground bully he is when confronted with a brave challenger with nothing to lose.

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