Apple CEO Cook doesn't expect China to seek revenge against Apple

Apple CEO Cook doesn't expect China to seek revenge against Apple
In the immediate aftermath of Huawei's placement on the U.S. Entity List, there were questions about whether China would retaliate against U.S. companies; after all, being out on the list means that Huawei cannot source parts, components, and software from U.S. firms (although it was given a limited 90-day reprieve). Outfits like Google, Qualcomm, ARM Holdings and others have basically cut ties with the Chinese manufacturer. Huawei will replace Android with its own operating system, but the loss of support from the U.K.'s ARM Holdings (which uses some American technology), Synopsys Inc. and Cadence Design Systems Inc. makes designing the beleaguered manufacturer's in-house chips quite difficult.

Some analysts have factored in the possibility that the Chinese government will get back at the U.S. by banning Apple devices (Goldman Sachs sees the tech giant's profits declining by 29% under such a scenario), and the country has reportedly created a blacklist of firms that it will seek revenge against. However, Apple CEO Tim Cook told CBS News this morning (via The Street) that he believes that Apple would not be on such a list. The executive said that having been in China for so many years, there is "a healthy level of respect for both sides." Cook did tell CBS News that despite his optimism on the subject, there is still a possibility that his company will be targeted by China.

Besides the "respect" cited by Apple's top executive, the Chinese government must know that any ban imposed on Apple would hurt the country even more. That's because the device is assembled in factories located in China with mostly Chinese employees doing the work. A ban against Apple in one of the company's most important markets would surely lead to production cutbacks and layoffs of factory workers in China.

Huawei's CEO praises the iPhone ecosystem

Cook not only discussed possible Chinese retaliation against Apple, but he also discussed what would happen if the U.S.-China trade war escalates and tariffs are imposed on the iPhone. Since the device is assembled in China, as we noted, it is considered to be an import from that country. As such, the iPhone faces an additional 25% tax if President Donald Trump decides to include smartphones in the next tier of products to be covered by the import tax, as expected. Certain cases for the iPhone and iPad are already being taxed, and Apple is eating the additional cost, which keeps the prices of these accessories the same. But that might not be feasible for Apple to do for the iPhone. Morgan Stanley analyst Katy Huberty says that if tariffs are imposed on the iPhone, the price of the iPhone XR could rise in the states by as much as $160.

A ban against Apple in China might hurt the Chinese more than the psychological effect of exacting revenge on one of Huawei's rivals. Even Huawei's founder doesn't approve of such a move. Ren Zhengfei, who is CEO of the company he started, has said, "iPhone has a good ecosystem and when my family are abroad, I still buy them iPhones, so one can’t narrowly think love for Huawei should mean loving Huawei phones." Meanwhile, Chinese consumers have been boycotting Apple and many have replaced their iPhone with a Huawei branded handset.



1. cncrim

Posts: 1590; Member since: Aug 15, 2011

Ok yeah, who will think Tim or any CEO of any company will come out and say my company hit get hit blah blah ..... zero. CEO job is keep investors interesting in the company, period.

6. sgodsell

Posts: 7606; Member since: Mar 16, 2013

Also people tend to forget that before any of this Huawei stuff started. Apple saw slumping sales in China all of last year (2018). Also don't forget that Apple at the beginning of this year permanently reduced the price of their iPhones in China to try and get more customers to buy Apple's iPhones. With this Huawei stuff happening, iPhones in China will continue to decline.

9. kiko007

Posts: 7521; Member since: Feb 17, 2016

Your response has literally nothing to do with what OP said at all.

10. sgodsell

Posts: 7606; Member since: Mar 16, 2013

It has everything to to with this article. "Apple CEO Cook doesn't expect China to seek revenge against Apple". Why would China seek revenge on Apple in China in the first place? Think about it, Apple has continued to see declines in iPhone sales, all the way back from the beginning of 2018. People in China were getting a better bang for their buck with Chinese branded smartphones. Also try to remember Apple dropped their iPhone prices in China early this year, because Apple saw significant drop in sales. If Apple was doing well in China, then Apple wouldn't have dropped their prices over there. Huawei already knows Apple sales were declining steadily, so why would Huawei retaliate against Apple?

12. iloveapps

Posts: 909; Member since: Mar 21, 2019

Its funny that you have to say iphone sales tanking in every apple article and yet you ignored Samsung profit for years which is tanking and phones aren’t selling. Heard the news in China about Samsung sales? Very disappointing.

13. sgodsell

Posts: 7606; Member since: Mar 16, 2013

Samsung sold almost 73 million smartphones in Q1 2019. Apple sold 36 million iPhones. Samsung continues to drop in China. That's a given, but that holds true for every other OEM, except the Chinese brands. Samsung dropped almost 7 million from Q1 of 2018. Huawei gained at everyone else's expense to claim almost 60 million in Q1 2019. Now Apple dropped the most by almost 16 million fewer iPhones. Apple took a beat down. Apple sales dropped everywhere, Samsung's dropped, but not in every market, like Apple did. Also Tim cook lied when he said the iPhone XR is the affordable iPhone. That was a flat out lie, which I believe and most others believe is why Apple tanked.

2. User123456789

Posts: 1345; Member since: Feb 22, 2019

Even people from rivals were caught using Apple stuff. Of course he has nothing to worry about.

8. oldskool50 unregistered

That is completely stupid. Just. ecause you may be a competitor, doesnt mean you sont use competitors stuff. Everytime you guys say this, it just sounds completely stupid. I use to work for Ford. I never owned one.

3. jacky899

Posts: 434; Member since: May 16, 2017

"A ban against Apple in China might hurt the Chinese more" That is complete factless b.s. China doesn't get much money from manufacturing of Apple products. Only about 3% to 6% of the manufacturing cost of iphones goes to China. The rest are component cost that goes to Korea, Japan, etc. The Iphone 7 cost $5 to manufacture in China per ZDNET and $8 per other sources for more recent iterations. However, the 100% cost is calculated into the trade deficit instead of the amount that actually goes to China. A large majority of the exports from China are non Chinese, primarily American brands, where nearly the entire profit goes back to the US not China. However, what US propaganda hides is how much money goes from China to the US. 1/3 of the world's Iphone users are in China. By banning Apple, China will lose some low quality sweatshop jobs in the short term but the amount of money that will be kept within China instead of going overseas to Apple will create far more quality jobs in the long run.​​e-largest-iphone-market-in-the-world/https://ww​w.s​​les-ch​ina-sales-grow-second-straight-quarter-st​rong-ipho​ne However, what China will suffer by banning Apple is civil unrest as Chinese love for Apple products is beyond rational. It is the ONLY brand where you have lines of kids waiting to sell their organs inorder to get their hands on. Even Huawei CEO have always openly stated his family's love for Apple products. The boycott of Apple product is simply government propaganda and accounts for 0.1% of the Chinese population. The real Chinese population holds Apple products in the highest regards and there will be an uproar or even civil war if the Chinese gov bans their IOS.

5. TBomb

Posts: 1705; Member since: Dec 28, 2012

I don't think that people are selling their organs anymore. i'm pretty sure that was a one-to-a-few time(s) case several years ago. which you could probably find at least 1 case for any major product. "hold your wee for a Wii" contest is something similar

11. jacky899

Posts: 434; Member since: May 16, 2017

It is not a few. There was a short documentary about it many years ago. There were thousands that sold organs for apple products in the earlier part of this decade.

4. Koloure

Posts: 3; Member since: Jan 10, 2018

Oh they will, but they will be inscrutable about it......

7. oldskool50 unregistered

They don't have to ban Apple directly. All they have to do is hack up Chinese tariffs which would force iPhone prices even higher, and people will just stop buying. And with China population ready boycotting the device and the sales have been dropping every year, they dont have to block it. Tim Cook is a smart businessman, but he is stupid as their fans when it comes to common sense. They all lack it.

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