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How Badly Will Apple Be Affected by a Total Ban in China?


May. 23 2019, Published 2:40 p.m. ET

Goldman Sachs says a ban in China would cause Apple’s profit to fall ~30%

Apple’s (AAPL) revenue from the Greater China region has plummeted in the last couple of quarters, which has been a big factor driving the company’s poor results.

However, the tech giant might have to deal with more trouble in the region. Its stock has fallen 14% since May 3 after US-China trade tensions resurfaced. Huawei and Apple have been at the center of the storm.

According to the latest note to investors by Goldman Sachs, Apple’s profits could slide almost 30% if China puts Apple on its blacklist. This action could lead to the reduction of the company’s bottom line by $15 billion annually, according to the investment bank.

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Apple faces more risks in China in case trade war escalates further

While Apple’s dependence on Greater China has reduced, the region still accounts for ~17% of its revenue and bottom line. Although the banning of Apple’s products altogether would be an extreme result, any tariff—or a partial ban—could also have a huge impact on the company’s bottom line, which has been struggling anyway.

Goldman Sachs analyst Rod Hall also pointed out that there would be repercussions of the trade war on Apple, as the iPhone maker produces most of its iPhones in China.

Apple’s market cap has fallen from over $1 trillion earlier this month to $841 billion. It’s now trailing Microsoft and Amazon.


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