The frictions taking place between China and the United States, focusing on the duties that the two countries mutually threaten to impose on their products, could lead to a rise in the price of smartphones. The estimate signed by JP Morgan comes a few hours after Apple’s stock market crash, which left 5% of its value on the table following rumors from Washington about Trump’s willingness to hold an intransigent attitude towards the eastern country.
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According to analysts, if the extreme consequences of the trade war were to go to the mark – turning into reality the duties that Trump has so far threatened against the other party – Apple should increase the prices of the iPhone by at least 14% to be able to compensate for full additional costs foreseen during production. More likely, explains JP Morgan, Apple would absorb the extra cost without downloading it to users, significantly lowering the large profits guaranteed to date by their devices, but without having to move the price bar further upwards.
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The only alternative for Apple is to move the production of devices into US territory: this prospect would not only be complex due to an entire assembly chain to be recreated, but also depending on the fact that costs would be 20% higher for Apple at least. In short, the hypothesis of productive autarchy appears to be hardly credible, although probably Donald Trump’s favorite. And although the analyzes converge on Apple (leader in the high-end market), the projection can only extend to the entire smartphone sector with various nuances linked once again to the geopolitical balances involving the countries of the major producers (USA, Korea, China, India).
In short, the geopolitical situation risks weighing heavily on the balance of the smartphone market in the years to come and Donald Trump will not fail to take these aspects into consideration during the confrontation with China. Bianca, where the tensions with the East that Cupertino is trying to absorb in every way originate . Today the stock on the stock market remains stationary, awaiting updates from the Oval Hall.
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