In 2018, Apple lost its second spot to Huawei as the second largest smartphone manufacturer, and the company might lose a lot more in 2019 since Apple might be the most affected company from the rising trade tension between USA and China. According to the survey the analyst attributes the problem to three key issues,
- Trade war fears have already undercut the U.S. equity market and fears of a hard landing for China add to that pressure
- The trade war tends to weaken the yuan, making a broad range of U.S. products less competitive and lowering the dollar value of earnings overseas
- Informal boycotting of U.S. products adds further to the U.S.-China trade deficit
Furthermore, Donald Trump’s recent suggestion to Tim Cook to start manufacturing the iPhones in the USA may have a pivotal change in the current smartphone market. If Apple shifts its manufacturing plants to the USA, then the price of iPhones will drastically increase, which may become the deciding factor of Apple’s future.
However, the current trade war might have a greater effect on USA’s economy rather than China, the major reason for this is any further tariffs would directly affect the U.S. shoppers more since the boost from prior fiscal easing is fading, and China has more scope to support its economy. The report summed up the current situation in six simple words:
“Everyone loses in a trade war.”
