Apple shares slip after Donald Trump remarks

Apple shares slip after Donald Trump remarks

Apple continued its downward slide after US President Donald Trump suggested that 10% tariffs could be placed on mobile phones, like the iPhone, and laptops made in China.

The shares, which have lost about a fifth of their value in a tech market rout since October, fell 1% in New York at one stage. Earlier in the week, Apple briefly ceded its crown as the world’s most valuable publicly traded company to Microsoft.

The company already is facing reports of suppliers cutting forecasts, signalling the new iPhone models introduced in September aren’t selling as well as anticipated.

Mr Trump’s comments to the Wall Street Journal that he may include Apple’s signature product in another round of tariffs on Chinese imports are another blow for chief executive Tim Cook.

“Maybe. Maybe. Depends on what the rate is,” the president said, referring to mobile phones and laptops.

“I mean, I can make it 10%, and people could stand that very easily,” he said.

The US is due to raise import duties on about $200bn (€176bn) worth of goods from China to 25% from 10% at the start of January. The vast majority of iPhones and other Apple products are built in China and then exported globally.

Some analysts said the comments may shake investors. With consumers “clearly price sensitive” and the average sales price of an iPhone reaching almost $800, “the last thing Mr Cook and investors want to see is additional tariffs added to iPhones and impacting demand drivers at this crucial growth juncture for the company,” Daniel Ives, an analyst at Wedbush Securities, wrote on Monday in a note.

The price of an iPhone ranges from $449 to $1,449 in the US, including older models such as the iPhone 7 that Apple still sells.

RBC analyst Amit Daryanani lowered earnings estimates for the company’s March quarter, citing softer demand for the iPhone from Apple suppliers. RBC also lowered its price target on the stock to $235 from $240.

Shares of Hon Hai Precision Industry, the biggest iPhone assembler, slipped less than 1% in Taiwan trading and have dropped about 40% this year.

- Bloomberg

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