(CTN News) – Apple (AAPL -5.62%) is likely to have even more difficult times in comparison to its competitors in the Big Tech industry.
This suggests that Apple is likely to face much more difficult times than its competitors. An analyst at Wedbush Securities called Dan Ives issued a note over the weekend in which he cautioned that Apple is in a particularly precarious situation as a result of the intensifying trade war that President Donald Trump is waging.
Ives mentioned that Apple is in a particularly vulnerable position. The warning that Ives had given was included in the memo that was passed around.
Apple is facing a very perilous situation.
Ives made this comment when speaking with reporters. Ives said, “The tariff-induced economic catastrophe initiated by Trump is a total calamity for Apple due to its significant production reliance on China.” “The tariffs are a total catastrophe for Apple.”
“The situation is a calamity for Apple.” Because ninety percent of Apple’s iPhones are manufactured and assembled in China, we feel that no other technical company in the United States is more adversely affected by these tariffs than Apple.
The price goal that Wedbush has set for Apple shares has been lowered from $325 per share to $250 per share, as was stated by the company itself. The current state of the market was taken into consideration before making this decision.
A three percent drop from its previous high, Apple’s stock reached $182 per share during the middle of the morning trading session on Monday. This is a fall from the previous high by three percent.
This was done as a response to the situation because markets continued to suffer losses as a result of President Trump’s imposition of sweeping tariffs on practically every trading partner of the United States of America.
This was done as a reaction to the circumstance. When compared to the price of the same shares throughout the course of the previous year, the price of Apple shares has declined by more than 25 percent since the beginning of this year. This is a significant decrease.
“In February, Apple and President Trump made the announcement that they would be investing a total of $500 billion in the United States,” Ives provided reporters with an explanation. In point of fact, according to our predictions, it would take three years and thirty billion dollars to move even ten percent of its supply chain from Asia to the United States.
This is estimated to be the case. Listed below is the length of time that will be necessary to complete the task. For this reason, relocation would cause major disruption to the process.
Consequently, relocation would be disruptive.
Additionally, he addressed the issue that “for consumers in the United States, the reality of a $1,000 iPhone being one of the best-made consumer products on the planet would disappear.” He expressed his concern by saying that this would be the case.
He brought up this extra issue, which is a concern on its own. For those individuals who are interested in acquiring an iPhone at a price of $3,500, we believe that the product ought to be made in either the state of New Jersey or the state of Texas, or in another state.
The data that are presented here offer irrefutable support for the viewpoint that we are taking. We are of the opinion that it is not feasible to produce iPhones in the United States due to the fact that each iPhone costs $1,000.
With regard to Apple’s gross margins, it is extremely probable that the impact that this tariff war will have on the company’s gross margins will be astounding in the short term.
An essential component of the United States of America is Apple, a technological behemoth that dominates the industry. It would be difficult to comprehend the extent of the increase in price points because there would be such a big increase in price points.
SOURCE: QZ
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