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Apple's profits could fall by 29% if China decides to avenge Huawei
Hardware Apple Huawei 2 min read 2 comments

Apple's profits could fall by 29% if China decides to avenge Huawei

The political consequences of the "Huawei affair" are still to be determined, but according to Goldman Sachs analysts, China could (theoretically) make Apple pay dearly for Trump's very expensive decision. The Cupertino firm could lose up to 29% of its profits.

At least that's what Goldman Sachs claims in a note to investors. If China decides to ban Apple, the American giant would lose 29% of its profits. It should be remembered that 17% of Apple's sales come from China, so it's a big market. However, this figure is to be taken lightly for two reasons. The first is that this figure is an estimate, the reality (if it were to happen) could well be quite different. The second is that this figure includes only sales.

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Will China react? © Rawpixel.com / Shutterstock

Indeed, other costs would have to be taken into account in this hypothetical scenario. It should not be forgotten that Apple manufactures in China, so a Chinese restriction of this type would cause manufacturing problems. Of course, it could place its plants in another country such as Vietnam or India, but the transition could be long and complicated. This is not a new idea for Apple because production costs have increased in China, it could see the greener grass elsewhere.

In any case, this scenario, although possible, is unlikely. Apple needs the Chinese market and China needs Apple, but the political involvement could go beyond that. Many factors are still to be taken into account in this trade war, but after all, after explaining that Huawei is very dangerous and spying on citizens, Trump also would be ready to turn around and face a trade agreement. As a result, national security is just one variable in the calculation.

Do you think China will block Apple?

2 comments

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  • storm 4 weeks ago Link to comment

    I don't see China blocking Apple as a first response. As a later development, sure. Blocking apple hurts Apple, not the US in the way that blocking Huawei hurts China. Huawei could fail utterly losing chips, sd cards, bluetooth, software and such and Apple would lose some value.


  • The CEO of Huawei has stated he has no intentions of banning Apple. But I don't think the Chinese may look at it that way? Just wait & see, I guess!