"Our back of the envelope math suggests the impact (of the new
tariffs) will be roughly $0.50-$0.75 (annualized per share) hit
to earnings with roughly $0.30-$0.50 from iPhones," the
Shares in Apple, which reported a surprise improvement in its
fortunes in China earlier this week, sank 2.5% in morning trade,
adding to similar losses a day earlier after Trump tore up a
trade truce with China that had lasted just over a month.
The United States and China have been locked in a trade war
marked by tit-for-tat tariffs since last year. The tensions have
disrupted global supply chains and roiled financial markets.
The BofA note also provided for the possibility that Apple might
raise prices of iPhones by around 10%, reducing demand by 20% or
around 10 million units.
Apple effectively cut iPhone prices in China earlier this year
after currency exchange rates had made the phones too expensive
for many Chinese consumers.
Globally, iPhone sales fell 12% to $25.99 billion in the latest
reported quarter, after dropping 17% in the second quarter.
(Reporting by Munsif Vengattil and Arjun Panchadar in Bengaluru;
Editing by Arun Koyyur and Sriraj Kalluvila)
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