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Home / Technology / Apple may face another China headache

Apple may face another China headache



<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The ongoing commercial war between United States and China could be set to take a significant toll on Apple s (NASDAQ: AAPL) business. "data-reaktid =" 11 "> The ongoing commercial war between the United States and China can be set to take one significant fee on Apple s (NASDAQ: AAPL) business.

<p class = "canvas-atom canvas text Mb (1

.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Per a report from & nbsp; Nikkei Asian Review after the arrest of Huawei CFO Meng Wanzhou in Canada at the request of the United States, [kinesiske bedrifter] has told employees that they will receive subsidies if they buy Huawei smartphones for a arrest from Huawei CFO Meng Wanzhou in Canada at the request of the United States, "[many]] after a report by Nikkei Asian Review Chinese companies have told employees that they will receive subsidies if they buy Huawei smartphones to help the company. "

People gathered outside Apple's Nanjing store.

Shoppers outside Apple's store in Nanjing, China. Should the crowd thin out? The source of the image: Apple.

These subsidies are said to be between 10% and 20% of the purchase price of the units, even though the report says "some [companies are] themselves cover the entire amount."

Here's why, if you are an Apple shareholder, these news should give you a break.

<h2 class = "canvas-atom clay text Mb (1.0em) Mb (0) – sm Mt (0.8em ) – sm "type =" text "content =" Apple's China exposure "data-reactid =" 27 "> Apple's China exposure

Apple is doing a lot in China, according to the company's latest annual filing generated nearly $ 52 billion in revenue from the Greater China region – about 19.6% of sales – in fiscal policy 2018. Out of the five geos graphic areas for Apple represent the Greater China third largest, after Europe and America. Region Apple Fiscal Year 2018 Revenue Part of Sales America $ 112.1 billion 42% Europe $ 62.4 billion 24% Greater China $ 51.9 billion 20% Japan $ 21.7 billion 8% Rest of Asia Pacific $ 17.4 billion 7%

Source: Apple data from 10-K filing.

It is also worth noting that Apple attributed it over an annual increase of more than $ 7.1 billion in revenues from China that it liked in fiscal 2017 "primarily to higher net sales of iPhone and services." [19659030] Apple does not describe how much revenue it generates from each product category by region, but it is important to note that nearly 63% of Apple's fiscal 2018 sales came from the iPhone.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "For a certain perspective, Huawei (as well as other Chinese brands such as Xiao mi) have already made life difficult for Apple's iPhone business in the Greater China region (as well as worldwide). According to the market survey IDC Huawei saw its market share on smartphones in the People's Republic of China, grow from 16.4% in 2016 to 20.4% in 2017. Apple's share fell from 9.6% to 9.3% over the same period Huawei (in addition to other Chinese brands like Xiaomi) has already made life difficult for Apple's iPhone business in the Greater China region (as well as worldwide). According to market research company IDC, Huawei saw its smartphone market share in the People's Republic of China grow from 16.4% in 2016 to 20.4% in 2017. Apple's share dropped from 9, 6% to 9.3% over the same period.

So, it's not as if Huawei wasn't already a problem for Apple, and a Now, as a result of the arrest of Huawei's Chief Financial Officer – who certainly will not improve the strained trade relations between the United States and China – Apple has to deal with Huawei. Instead, Huawei was already a tough competitor, and now the competition in a big market is looking even tougher for Apple.

<h2 class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " What can Apple do? "data-response time =" 36 "> What can Apple do?

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "We already see Apple trying to increase sales in different regions With aggressive purchasing offers, the Apple news site 9to5Mac actually reports that on December 21, the company launched an iPhone XS and iPhone XR purchase budget offerings in China, including a prominent banner on the Chinese version of the Apple.com website. -reactid = "37"> We are already seeing Apple trying to increase sales in various regions with aggressive purchasing offers, in fact, Apple News site 9to5Mac reports that on December 21, the company launched an iPhone XS and iPhone XR procurement budget offerings in China, including a prominent banner on the Chinese version of the Apple.com website. "

This, the site says," is similar to what we have seen Apple aggressively promote in the United States. "

<p class =" canvas-atom canvas text Mb (1.0 em) Mb (0) – sm Mt (0.8em) – sm "type e = "text" content = "Beyond potential card Apple's best chance of success in China (and honestly, worldwide) is to make sure it builds convincing products that customers are willing to pay substantial premiums ms for. Many China-based smartphone providers, including Huawei, are launching new devices at a faster pace than Apple does. And they are in some cases adopting new features and technologies before Apple does. (An example: Huawei's highest end smartphones come with triple rear-facing camera systems, while Apple's top iPhone XS and iPhone XS Max two-camera ships, and the iPhone XR come with a single camera.) "Data-response time =" 39 "> Beyond potential short-term tactics, Apple's best chance of success in China (and, indeed, worldwide) is to ensure that it builds compelling products that customers are willing to pay for substantial premiums. Many China-based smartphone providers, including Huawei, are launching new devices faster than Apple does. And in some cases, they use new features and technologies before Apple does. (An example: Huawei's highest end smartphones come with triple rear-facing camera systems, while Apple's top iPhone XS and iPhone XS Max ships with two cameras, and iPhone XR comes with a single camera.)

Finally, it will be interesting to see how Apple is doing with this latest headwind, but it seems s not to be so easily lutes.

<p class = "canvas-atomic text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Mer From The Motley Fool "data-response =" 41 "> More from Motley Fool

<p class =" canvas-atom lerret text Mb (1.0em) Mb (0.8em) – sm "type =" text "content =" [19659035] Ashraf Eassa has no position in any of the aforementioned shares, Motley Fool owns and recommends Apple, Motley Fool has the following options: long January 2020 $ 150 calls on Apple and short January 2020 $ 155 appeals to Apple. The Motley Fool has a disclosure rules . "data-response time =" 49 "> Ashraf Eassa has no position in any of the aforementioned shares. Motley Fool owns shares of and recommends Apple Motley Fool has the following options: long January 2020 $ 150 calls on Apple and short January 2020 $ 155 appeals to Apple. Motley Fool has a publishing policy.


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