iPhones have been a very popular offering in China, as opposed to a lot of other western products. The App Store is also the biggest software store in China due to the Play Store being entirely banned from the Asian country. However, iPhone shipments to China have been slowly staggering over the past year.
Apple’s Tim Cook has commented on the matter saying that sales in the region are improving and the company has cut the price of their products to boost sales. According to UBS, iPhone performance improved during the month of April compared to previous months where sales were down a catastrophic 66% in comparison to the previous year.
According to UBS analyst Timothy Arcuri, sales have improved thanks to the easing tensions between the US and China:
One of the reasons Apple CEO cited for China improvement was increased consumer confidence due to easing of US-China trade tensions. However, in recent days, trade tensions have escalated and it bears watching whether this affects China consumer sentiment.
Unfortunately for American companies, the Trump Administration has increased tariffs on Chinese-imported products. This could mean that not only could this worsen US-China relations even more but that costs of iPhones could increase once again as a lot of the parts in iPhones are Chinese products. Not only that, iPhones are actually manufactured in China. The Chinese government could respond with similar tactics and directly hinder iPhone sales by making them unprofitable for Apple without charging absurd prices.
Currently, Apple is not affected by the tariffs but this could change at any moment, proving a disastrous case for the Cupertino company.
[via UPS]
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