Apple is looking for ways to offset new import tariffs
Apple is preparing for the impact of new US tariffs announced last week. These tariffs could significantly complicate the company's business, as Apple depends on production in other countries.
Here's What We Know
After the announcement of the import tariffs, Apple's shares fell by almost 10%.
According to Bloomberg's Mark Gurman, Apple could employ several strategies to mitigate the impact. One option is to negotiate with component manufacturers and suppliers to secure better prices, which will reduce overall production costs.
Apple could also partially bear the costs, given its average profit margin of 45%. In addition, the company is likely to make short-term price adjustments while it is in "assessment mode".
Apple has long maintained stable prices for its high-end products, such as the iPhone, which has remained at $999 since the iPhone X was launched in 2017. However, the new tariffs could change this pricing structure, as China is subject to tariffs of 54%, India 26%, and Vietnam 46%. Several countries, such as India and Vietnam, are actively negotiating trade agreements, but Apple still risks facing higher production costs.
To reduce the impact of tariffs, Apple has been stockpiling goods in the US for several months. By importing products before the tariffs come into effect, the company will be able to sell its products at current prices for some time. However, this tactic will only delay the price increase, which is likely to become a news story in September when the new iPhones are released.
Apple is ready to raise prices if necessary, although the company will try to minimise the impact of tariffs on consumers. Tim Cook may seek exemptions from the tariffs, as he has done in the past. Apple's ability to cope with the changes will be key to its competitiveness in the global market.
Source: Bloomberg
