An Ban in China Could Cut Apple’s Revenue There in Half

In a note to investors, Goldman Sachs has warned that Apple’s (AAPL) profits could fall ~30% if China blacklists the iPhone maker. Apple stock has fallen ~17% since May 3, after the US-China trade war picked up again. Apple has been hit hard by the trade tensions between the two countries, which appear unlikely to reach a deal.

Another investment bank is warning of China boycotting Apple. Citi projects that the boycott could cost Apple nearly half of its shipments in China, and believes the trade war could prompt Chinese citizens to switch their allegiance to Chinese vendors such as Huawei.

Citi has lowered its target for the company from $220 to $205, which still implies a 15.6% gain from its current price. While China’s portion of Apple’s revenue has shrunk over the last two quarters, the region still accounts for ~17% of the company’s overall revenue. Other factors behind that decline include competition from value-for-money smartphones from local vendors, the slowing Chinese economy, and Chinese citizens balking at higher iPhone prices.