Apple has all of its eggs in one basket: China.
The world’s most influential consumer electronics company shed $44 billion of market value Friday after a pair of pronouncements from Beijing and Washington cast a spotlight on its massive Chinese production base, from which almost all of the world’s iPhones are made.
U.S. President Donald Trump this weekend “ordered” American companies to immediately start looking for alternatives to manufacturing in China, which is something Apple is thoroughly unprepared for, according to analyst Daniel Ives of Wedbush Securities Inc.
Apple’s main assembly partner, Foxconn Technology Group, has claimed that it has the capacity to build all of the Cupertino company’s U.S.-bound iPhones outside of China, however all indications are that to deploy it would require a great deal of time and money.
Cook’s ability to lobby Washington for tariff relief will be tested over the coming weeks. He has so far been able to obtain a temporary reprieve for iPhones, iPads and Apple laptops, which won’t be subject to U.S. tariffs until Dec. 15. But going forward, unless an unlikely rapid resolution to the trade war is reached, Apple looks like it will have to draw up comprehensive plans for building iPhones outside of China, however costly that may be.
MacDailyNews Take: Regardless of the U.S.-China trade fracas, as we wrote back in April, “It’s smart for both Apple and Foxconn to diversify assembly outside of China. There’s no sense having all of your eggs in one basket.”
Evey manufacturer in the world seems to have all all their eggs in this basket.
Have u seen or used a product that does not say made in China lately?
That said, i like how Trump is facing these major trade imbalances head on rather than kick the can down the road like so many before him.
Level the playing field …… why shouldn’t it be level to start with.
Like any change or shake up… of course there is going to be some pain in the process before thing balance out though.
Winning. So much winning we can’t stand it.
I think the $44 billion drop in APPL market valuation might also be due to over reliance on US policy remaining consistent from one hour to the next.
Correlation is not causation….. ….just review Apples chart and see how many of these drops there have been in the past..when there were no china issues..
They are just making their stories.. after all they have to keep their jobs and earn a few bucks..
who pays you for your incessant Apple and Trump worship? you are nothing if not predictably hypocritical
You must be one of these new breed of liberals ( who emerged after Trump was elected) .. it seems positivity annoys you a lot….. typical!
The only hypocrites in town are the type u probably associate with.,. Bunch of intolerant bigots,.. who cant bare to hear something that is not a part of their indoctrination and dogma.
Maybe u should be a bit more thorough with your knowledge before u bash… but i guess it is very convenient for you to neglect all the cliticization i post about Apple when due.. ( not dogmatically like some trolls here but when due ).. it wont suit your delusional story. Right!?
Get a life…
I have reviewed the chart. On the 23rd, APPL rose about 1,5% based on the White House giving encouraging news about China the previous evening. That sharp rise continued from opening until the Trump “hereby order” tweet. In the hour after the tweet, the stock dropped from about 212 to about 202, leaving a net loss for the day of around 5%, or $44 billion in stock value. That isn’t just correlation. It is causation.
I dont believe you get my point..
Apple has had a quite few drops like that and even worse.. …. none of them having anything to do with China or US policy. To say Apples 44 billion drop shows growing cost of reliance on China is an opportunistic effort to creat fear and uncertainty…. . in a way its a self fulfilling Prophecy…
One can also as easily and more validly say Apples incredible market cap of 940 billion is due to reliance on China. Without which it would have been no where near.
The Only causation, 90% of the time, is panic and knee jerk reaction of loose hands ..and lemming like behavior every time some news comes up.
And headlines like this try to fully exploit that to its fullest.
Causation is the panic.. not what is actually transpiring at Apple…
If I had only sold my stock in September 2018 when it was $232. Then bought it back in March when it was $149. Wait, I bought it at $35. #WINNING
Trump is the sole cause of the stock exchange boomerang. He just missed another “Gimme” from the previous administration, in his quest to make the world into his own image… Trump is the Penguin from Batman. He takes joy in his criminal behavior in a relatively untouchable position. He has evil henchmen (Stephen MIller anyone). He is obnoxious. Case closed. Have at it, sycophants!
Apple and Foxconn have already started diversifying their manufacturing base with facilities already open in India and a deal signed for locations in Indonesia. Just as it took time for manufacturing to move to China, it will take time to at least partiatlly disengage.
Apple cannot pull 100% out of China. Nor can it manufacture 100% in China. If Apple wants to sell in India and China, then it must manufacture (assemble) in both places. This is regardless of what the buffoon in the White House tweets about.