The Trump tariffs announcement has so far wreaked havoc on Apple’s supply chain across multiple countries and its market capitalization, which saw the technology giant lose $250 billion in just a single day. It can be assumed that the decision taken by the U.S. government will force the company to increase the prices of its products unless it obtains an exemption, and according to a research note from analysts, Apple’s net income for the year is estimated to take a whopping $33 billion hit.
New research believes that Apple has a low chance of exemption because of the way the new tariffs are structured
With the new tariffs in place, whatever decision Apple takes will have a negative outcome. If it attempts to absorb the monumental costs and pass the savings to its consumers, its gross revenue will take a severe hammering. On the other side of the spectrum, if it embraces the levies and ends up increasing the prices of its products, the additional sum will be too much for customers to fathom, resulting in decreased purchases and, consequently, a similar hit to Apple’s revenue.
With this turn of events, AppleInsider got a hold of a research note from Morgan Stanley analysts, which estimates that the Cupertino giant will lose around $33 billion in net profit. Fortunately, these individuals appear to claim that Apple has some quantity of iPhones that have already been manufactured, meaning that it can hold off increasing the prices of its devices for some time. As for exemptions, despite the company’s pledge to invest a mammoth $500 billion in the U.S. over the course of four years, Apple might not obtain any reprieve from these levies.
Analysts state that the technology firm has a 1 out of 5 chance to gain these exemptions, but the way these are structured means that Apple’s chances of acquiring a victory in this area appear slim. In related news, TF International Securities analyst Ming-Chi Kuo says that Apple is expected to lose between an 8.5-9 percent hit to its gross annual revenue but highlights some steps to help it overcome such burdens, which includes ramping up iPhone production in India. Unfortunately, this measure can only be beneficial if this country and others obtain an exemption, but looking at the recent development, we are uncertain that this will happen.
