Trump inflates Apple's share price since his inauguration; wants company to build iPhone in the U.S.
by Alan Friedman / Jan 04, 2019, 5:53 PM
During a chat with reporters today, President Donald Trump made his first comment on the shellacking that Apple's shares took yesterday (via C-SPAN). After the market closed on Wednesday, the company lowered its revenue guidance for fiscal Q1 of 2019, stating that fewer consumers in China upgraded to the latest iPhone models than expected. That led to a 10% decline in Apple's shares on Thursday.
While the president says that he isn't worried about Apple's stock price decline and the widespread tech rout that accompanied it, he also fails to take responsibility for the U.S.-China trade war that has dampened China's economy. Trump initiated the trade war by imposing tariffs on Chinese imports into the states due to his belief that the U.S. trade deficit with China means that the U.S. is losing some sort of ball game with the country.
Once again, the president tossed out some incorrect stats in an attempt to prove his point. Talking about Apple's stock, Trump said that the shares have "... gone up hundreds of percent since I'm president. Apple was at a number that was incredible and they're gonna be fine; Apple is a great company." The truth is that since the day of his inauguration in January 2017, Apple's shares are up 26.7% taking into account dividends and splits. During the Obama administration, Apple's share price (adjusted for dividends and splits) rose from $7.48 to $116.35, a greater than 15-fold move. But that was over an 8-year period. To be fair, let's look at Apple's performance over a comparable time frame. From January 20th, 2017 to January 4th, 2019, Apple's shares rose 22.2% under Trump. From January 20th, 2009 to January 4th, 2011, the stock rose over four-fold under Obama.
While Trump did say that Apple is a "great company," the president wants Apple to move its manufacturing from China to the U.S. Making another promise that he has no control over, Trump said today, "China is the biggest beneficiary of Apple, more than us ... I want Apple to make their iPhones and all of the great things that they make in the United States, and that'll take place."
Back in July 2017, Trump said that Apple will build "three big plants, beautiful plants" in the U.S. He was quoted as saying, "I spoke to [Mr. Cook], he’s promised me three big plants—big, big, big. I said you know, Tim, unless you start building your plants in this country, I won’t consider my administration an economic success. He called me, and he said they are going forward." However, Apple never promised the president that it was building these factories, and Cook never told Trump that Apple was building these facilities in the U.S.
Posts: 587; Member since: Nov 03, 2011
Man I don't know about that, you know how much they save by having them build it? Not sure if they could keep anything a secret if they started to manufacture them in the US. Trump is just another story I'll stay distanced from.
posted on Jan 04, 2019, 5:58 PM 1
Posts: 2445; Member since: Mar 23, 2012
Apple should indeed move all their manufacturing to USA, it's good for the country and Apple as a company. A massive company such as Apple being totally dependent on China for all their products is just crazy to think about. It's a national security issue. And also Apple can provide thousands of job opportunities for their own people. Yes, initially they'll have to reduce their profit margins a bit but with time they can pick up the pace once again.
posted on Jan 04, 2019, 7:24 PM 9
Posts: 1299; Member since: Sep 04, 2015
Apple won't reduce profit margins they'll just increase the prices. Moving the production to the US makes labor significantly more expensive, more than 5 times as expensive. Not to mention increased transportation costs for parts from all over the world and such. You can expect prices to take at least another $100 hike to compensate for it.
posted on Jan 05, 2019, 2:13 AM 5
Posts: 57; Member since: Sep 25, 2012
But Tim Cook said in an interview that China is no longer cheap for manufacturing, but the reason they still go there is because China is the leader when it comes to the quality and precision of assembly and manufacturing etc. So companies go there for that these days and less so for the cost of manufacturing.
posted on Jan 06, 2019, 1:48 PM 0
Posts: 71; Member since: Feb 01, 2013
Let's assume that labour costs stay the same (which is insane); how do you maintain the same supply chain for components which in China, in Shenzhen are almost next door? You'd have to move the entire chain of suppliers to the US on top... But as others have said, they won't take a profit margin hit but the phones will just have to cost 50 to 100% more.
posted on Jan 05, 2019, 3:54 AM 0
Posts: 455; Member since: Feb 21, 2013
Alternatively, Apple can look at local suppliers in the United States that manufacture components that can be used on Apple products. So rather than have them completely assembled and packaged in China, they can ship half-made devices to the U.S and complete the assembly and packaging by sourcing the remaining components and materials from local suppliers.
posted on Jan 05, 2019, 4:12 AM 0
Posts: 3324; Member since: Jul 22, 2014
Piyath, it's obvious you don't know how to run business. What you think is good for the U.S. but very bad for the product pricing. Labor cost is lower in china because they have lower cost of living. Every component you need in chinese production is literally a block or doorstep away. There are communities built for the purpose of easy distribution and logistics. Right or wrong, Chinese laws about employment are more favorable to the companies than to the employees. You try to make americans work 'til wee hours and all you get are lawsuits. Geographically, China is in the middle of every raw material you need. You need aluminum and nickel? Get them from indonesia or philippines. You need li-ion batteries? Africa and tibet are just hours away. If arab countries have oil as bread and butter, china have manpower and strategic location. Globalization will kill U.S. if they keep resisting these changes, japan is also struggling to keep up with the competition because the hermit country don't want to do too much business outside.
posted on Jan 05, 2019, 6:02 AM 5
Posts: 427; Member since: May 16, 2017
The whole trade deficit is dishonest US government propaganda. Only about 3% to 6% of the manufacturing cost of iphones go 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 from 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. Besides dollar store bargain bin products, have you seen any high dollar Chinese brand products selling here? However, what the Trump administration hides from you is how much money goes from China to the US. 1/3 of the world's Iphone users are in China.https://qz.com/687017/its-o...https://www.scmp.com/tech/e... Many American cars are made in China because they sell huge numbers in China. For example, GM sells more cars in China than in the US. However because it is made in China, the amount sold in China is not counted in the trade deficit despite the $billions flowing from China consumers to the US. This is why the trade deficit argument does not reveal what is actually happening with money flow. Therefore if you look at the meaningless deficit numbers, it seems like US is at a disadvantage. However, if you look at the actual profits earned from consumers of the other country, the US has a lopsided win vs China.
posted on Jan 05, 2019, 2:21 PM 3
Posts: 426; Member since: Sep 25, 2012
If iPhones was manufactured in the U.S say goodbye to the already ridiculous 1000+ and say welcome to 1500-2000 range. Apple will sink at this price.
posted on Jan 04, 2019, 6:07 PM 21
Posts: 250; Member since: Feb 12, 2016
You mean 3000 to 4000 range would be more accurate. I just paid 200$ for a cake, cake that took 2 hours to make no engineer's involved. And paid 20 $ to buy a printer that was shipped have way across the globe and still made a boat load of profit. You know what it takes to make a printer surely a lot more then two hours in a apron.
posted on Jan 05, 2019, 6:53 AM 3
Posts: 23; Member since: Jun 12, 2015
Was this meant to be a editorial or an article? So hard to tell with the media whenever a Republican is President.The manufacturing industry posted net job gains of 284,000 over 2018, capping its best calendar year since 1997. The head dude must be doing something right.
posted on Jan 04, 2019, 6:16 PM 4
Posts: 6749; Member since: Feb 10, 2012
Two words: Seasonal jobs
posted on Jan 04, 2019, 10:32 PM 1
Posts: 881; Member since: Aug 28, 2018
Like my 10% pay raise that he said he gave us military personnel. This guy loves lying! We got 2.6% pay raise. Idk where he got 10% from.
posted on Jan 04, 2019, 7:02 PM 7
Posts: 1259; Member since: May 01, 2017
It's still a raise..
posted on Jan 04, 2019, 7:24 PM 0
Posts: 2541; Member since: Oct 31, 2011
Yes, Apple is struggling to sell their latest devices due to the high price, so let's raise the cost to manufacture them exponentially. That'll save them! Trump has all the smarts of a rancid half eaten potato.
posted on Jan 04, 2019, 8:16 PM 5
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