Apple’s Valuation Could Tank Drastically: But Tim Cook Doesn’t Seem Anxious

Must Read

Elon Musk Added Over $100 Billion To His Net Worth In Just 1 Year, Leaves Jeff Bezos Behind

Jeff Bezos may the world's richest person in the world but it's Elon Musk who has been...

Elon Musk Overtakes Bill Gates And Becomes the 2nd Richest Person in the World

It's been a good week for Elon Musk and his electrical vehicle business Tesla. Earlier this week,...

Free Netflix In India From December: Netflix In A Pursuit Of New Subscribers

A month ago, we reported how Netflix might be brewing something interesting that could lead to a free...

The escalating tension between the US and China could have adverse effects on Apple’s valuation. As much as that the world’s third most valued company could lose one-third of its valuation if the dust doesn’t settle soon.

Apple CEO Tim Cook, in a recent interview with CBS, seemed confident of Apple’s safety amidst the ongoing trade tensions between USA and China. When asked about its potential ramifications, he had this to say:-

“Currently the Chinese have not targeted Apple at all and I don’t anticipate that happening, to be honest”

However, the recent reports and the recent turbulence in Apple’s stock prices portrays a different picture altogether.

Advertisements

Apple’s Valuation: The Importance of China

China has always played an integral part in the success of Apple. Outside the US, it is the biggest market for the iPhone maker. The numbers prove this fact. In fiscal 2018, Apple was able to generate a revenue of $51.49 billion from Greater China alone. Out of the 900 million iPhone users worldwide, 243 million users are in China alone. Therefore, a huge chunk of Apple’s success is dependent on its sales in China. Should the Chinese government agree to even partially ban or limit the sale of iPhones in their country, it is going to affect the Cupertino giant very adversely.

This fact is very vividly depicted in the stock prices of this company. The month of May witnessed the banning of Android on Huawei devices, the most controversial move made in the US-China trade war yet. Following that, and Chinese threats to boycott American products, the Apple stock prices took a huge tumble. The prices went down by a massive 13% in that month alone. If iPhones and other American products are indeed banned by China, the stock prices are estimated to slump roughly about a third (29%) of their total value to $130! The decrease in stock prices led to a tremendous decrease in the market value of the company. In only a week, the iPhone maker lost about $75 billion in valuation!

Therefore, China is vitally important for Apple to be successful as a global giant. However, regardless of the trade-tensions, Tim Cook seemed incredibly confident about the stability of his company in China.

So, what are the factors that are giving confidence to Tim Cook about China?

Apple Not In That Weak a Position

Regardless of the importance of China to Apple’s plans, it cannot be denied that Apple does give a lot back to the Chinese people. The company has a direct influence on the jobs of about 5 million Chinese workers. On top of that, it regularly makes significant donations for children welfare and has also invested in a lot of Chinese companies like that of Didi Chuxing. Therefore, if the Chinese companies decide to ban Apple products, they won’t be coming out of the deal unhurt either.

Advertisements

Who would want to ban a company that provides jobs to so many of its people?

However, what China can and is planning to do is to increase the tariffs on incoming US goods. On Saturday, the government did so on US Goods worth about $60 billion! Some of the goods have had their tariffs increased by as much as 25%. Now, if the same happens to the iPhone, its price will be increased by over $100, making it a lot more expensive than it already is. This is going to adversely affect the sales of the Cupertino giant, which are dwindling as it is.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

India Bans 43 More Apps As Indo-China Feud Continues

The latest move of the Indian Government has proved that Chinese-origin apps won’t catch a break any...

ShareChat Acquisition: What’s Google Up To?

The news related to acquisition of ShareChat is once again making rounds on the internet. It seems like Google...

Elon Musk Overtakes Bill Gates And Becomes the 2nd Richest Person in the World

It's been a good week for Elon Musk and his electrical vehicle business Tesla. Earlier this week, after Tesla Inc.'s rocky road...

iPhone 12 Plagued With Serious Problems: Should You Buy It, Still?

A serious problem with Apple iPhone 12, identified recently, is good enough to give a second thought to your decision of buying...

Facebook Threatens Research Team To Shut Down In A Bid To Hide Their Dirty Secrets

Facebook Inc. (NASDAQ:FB), in a bid to hide their dirty secrets, recently threatened a small academic team to shut, all in the...

Does CCI Verdict On Reliance Future Group Deal Hints Who Will Have The Last Laugh?

Biyani's Future Group, Ambani's RIL, and Bezos' Amazon have been in a three-way dispute for the past month. This dispute was sparked...

In-Depth: Dprime

Will ‘TikTok By Microsoft’ Be A Winner?

For the last two years, TikTok has been in the public eye for all sorts of reasons. First, it was the exploded...

Facebook Subscription Model: Looking Beyond Ad Dollars?

Seldom do job listings create a stir this gripping. However, when the job listing in question is a stealth post from Twitter,...

Will The Online Food Delivery Market in India End Up Becoming A Two-Horse Race?

It's pretty much evident that the food delivery space in India is all set to get riled up soon enough as one...

More Articles Like This